tag:blog.alchemistaccelerator.com,2013:/posts Alchemist Accelerator Blog 2018-10-04T16:00:06Z Alchemist Accelerator tag:blog.alchemistaccelerator.com,2013:Post/1304301 2018-10-04T16:00:06Z 2018-10-04T16:00:06Z An Interview with Na’ama Moran, CEO of Cheetah, Alchemist Class 2


Na'ama Moran came to the US from Israel to study economics, math and political science at Cornell. After school, Na'ama joined NYC’s emerging markets hedge-fund, Greylock Capital Management, as an analyst. She left finance to pursue her dream of building products that make people's lives better with technology. She moved to Silicon Valley where she concurrently took classes in Computer Science at Stanford and co-founded Zappedy, a services platform enabling local businesses to close the loop between online marketing and offline sales. The company was acquired by Groupon in 2011. While working at Zappedy, Na'ama encountered a large variety of restaurant owners and food entrepreneurs. She discovered the hardships of running a restaurant and was surprised by the lack of transparency and ease-of-use in such an important marketplace. She decided to do something about it. Na'ama met cofounder Peretz Partensky while camping together at Burning Man. The two started working on what would eventually become Sourcery and raise $5M in funding. Her experience at Sourcery  led to her founding Cheetah Technologies to be the easiest, fastest, and most affordable way for small-medium businesses to get their daily supplies and services. In her spare time, Na’ama loves to practice yoga, hike the beautiful Bay Area trails, and read science fiction books.

What exactly is your startup bringing to the marketplace today?

My company today is like an Instacart for small businesses. We enable businesses to order their daily supplies from their mobile phone, anytime and from any place, and connect to a large network of local and national wholesale suppliers.

What was the impetus behind starting that? What made you think this is a good idea? What was the inspiration behind this venture?

I've worked with small businesses for the last couple of years, initially with restaurants in my previous business, Sourcery. What was really interesting about this market is the lack of transparency and the lack of a convenient way for small business owners to manage their daily purchasing and know product  pricing in advance. The way they manage their businesses is very antiquated. By accessing wholesale suppliers that are priced transparently on our app, and building this alternative supply chain, we’re enabling small businesses to have access to both local and national vendors, and benefit from a very convenient same day or next day delivery.

Can you talk a little bit about your background before the startup?

I worked in finance in a hedge fund for a couple of years right out of college. Then I moved to the Bay Area and I've been doing my own startups since then. For the last couple of startups  I've run, I've been working with small business owners primarily in the food service space. That gave me insight into the types of problems they were having.

Is there any previous experience or situation, either personally or professionally, that you felt helped prepare you for this startup? Was that working in finance or working with food services? Is there one thing that helped prepare you for what you're going through today?

I don't know if there was one thing. I think it's the connection of all the different businesses I’ve been doing for the last ten years. All of those startups taught me something different about finding product-market fit, building a scalable business, building and scaling a team. At my previous company Sourcery, which is the company that was enrolled in Alchemist, is when I got most familiar with the problems of small restaurants and small businesses in the food service space. It gave me deep familiarity with the problem and the impetus to come up with a solution.

On the topic of Alchemist, what made you apply to Alchemist?

I really like Ravi and his focus on the B2B space.I thought they had a very strong network of mentors.

Now that you've gone through Alchemist, what do you think was the most valuable thing you took from going through it?

It has a very strong network of mentors and alumni that is valuable for early stage startups. Especially people who are creating very large businesses in the B2B space and have a lot of knowledge and experience to share. The preparation for the demo day was very useful as well.

What is the most challenging matter you guys are currently facing? Fundraising, talent recruitment, product development?

I think recruiting in the Bay Area continues to be a very challenging endeavor, because the environment is so competitive. I would say being able to recruit top talent continues to be our biggest challenge. Our business is operations heavy and therefore, the various challenges we are facing have to do with scaling operations.

Can you talk through one of the highest highs and lowest lows of the last month?

We've grown our topline by more than fifty percent on a quarterly basis, compared to last quarter. This is definitely one of the highlights. One of the low moments we had, had to do with  recruiting. We gave offers to people that we really wanted to bring onto the team and they we were not accepted. This was pretty disappointing.

Looking to the future, what constitutes success and what are your goals in the next twelve months?

Being able to meet or exceed our goals would be a strong indication that we had a successful twelve months. We have certain projections and they're pretty aggressive so being able to, as they say, “meet them or beat them” would be really good.

What entrepreneurial lesson or skill do you think took you the longest to learn or are you still continuing to work on?

I think there is a skill in finding product-market fit. Unless you get lucky, you need to develop this skill in a very methodical, focused way. I believe I have been able to develop this skill over time, but I'm sure there is still a lot to be learned. Today, with my current company, I think we have a proof that we have found product-market fit and the biggest challenge is to scale the business very rapidly and be able to confront very strong competition in our markets. The challenge is different. The challenge is really about scaling a business and being able to sustain it, rather than figuring out if we have product-market fit.

And so if you could hypothetically go back to yourself on the first day of your startup, what advice would you give yourself?

Be able to let go of bad ideas and bad people faster.

Is that similar to the Silicon Valley saying, “Fail quickly, fail often”? Is it better to get through a bad idea and move on to something good than to hold on to it?

Yes. Being able to let go of bad ideas or bad strategy or bad people a lot faster probably would have made me successful faster than I have been.

Do you personally have any advice for founders who are not from the US?

It’s all about the network you build here. For people who are not from the US, it might be a little bit harder to build their networks. Being able to build a network as fast as possible is probably the biggest advice I can give.

Has there been anyone specifically that helped you get to where you are today, that you think you wouldn’t be here if it weren’t for them?

There are various people like that. Some of my investors have been incredibly supportive and informative in helping me to get where I am. There have been people I work with and colleagues that have been instrumental in helping me get to where I am today. I don't think there is one person. There are multiple people, between investors, colleagues and mentors, that I can point to.

How did you get in contact with soe of these people and develop that relationship? That is something a lot of founders struggle with, building networks and trying to get to know these people. They find it really hard.

It’s a good question! It's just a matter of always trying to make connections or initiate meetings. Even if the meeting doesn't necessarily work out to provide you what you want, ask the person to introduce you to other people that could be useful. Just constantly build that network with every meeting that you have. Be able to build a network through friends. I went to Stanford for a certain period of time, I met some people there. I went to Alchemist and YC, these are networks I am a part of. All these different organizations are ways to build those networks.

Of all the jobs you can have, startups are more on the intensive side. The types of people that start companies, tend to have a passion for it. For you, whether it be five or ten years from now, what constitutes success for you personally and this venture? What would make you feel this was all worth it at the end of the day?

I think it would be the impact I end up having on the lives of my customers and employees. Hopefully, I will see some significant monetary return for my efforts as well. I'm doing this  to really have an impact and change the way people are doing business, and change the way our employees are living their lives. Creating wealth for both my customers, employees is my number one goal and inspiration.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures/year. Learn more about applying today.]]>
Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1325760 2018-09-27T16:00:03Z 2018-09-27T16:00:04Z An Interview with Scott Raney, Managing Director, Redpoint Ventures

Scott invests in entrepreneurs at the seed, early and growth stages with a focus on cloud infrastructure, open source and SaaS. He’s especially interested in the rise of distributed computing and developer-facing businesses. Scott serves or has served on the boards of Guild Education, LaunchDarkly (an Alchemist company), Hashicorp, Platform9, Sourcegraph and Twilio, and led Redpoint’s investments in Stripe and Collective Health. Past investments include adap.tv (acquired by AOL), Cloud.com (acquired Citrix), Heroku (acquired by Salesforce), Jumptap (acquired by Millennial Media), and RelateIQ (acquired by Salesforce).

Prior to joining Redpoint, Scott was responsible for new products at NorthPoint Communications, a data CLEC providing nationwide DSL services. Prior to NorthPoint, Scott worked at Bain & Company helping clients in the private equity and technology industries.

Scott, how did you get into the world of Venture Capital?

I’d worked as a developer, product manager, and business development manager at a variety of companies including a couple of startups. I had a passion for entrepreneurship and technology, and I had an opportunity to join Redpoint as an associate a number of years ago. I’ve been lucky enough to get promoted a number of times and be in a position to work with a lot of really great entrepreneurs over the years. It's been a lot of fun.

You said you were a developer. Is that what you graduated college with?

I graduated with a B.S. in Electrical Engineering and had done a bit of software development as a part of my academic career. Then I joined, what at the time was called Andersen Consulting, but is now Accenture, as a software developer and, among other things, worked in their Advanced Technology Group. I did a lot of software development there at the dawning of client-server, and also got exposed to networking and communications and really fell in love with that.

Is your background in software development what led to your investment in LaunchDarkly?

I'm going to take it back a few years to 2007 and the launch of Amazon Web Services. As a former software developer, I saw the impact that would have on development, but also the emergence of this trend called DevOps, that we all know and love today. I met the founding team of Heroku, which was building the first PaaS (Platform as a Service.) Through that experience, I developed a deep admiration for entrepreneurs working on building products that developers love. You’re not selling products to developers, but you're selling through developers to organizations to solve big business problems. Heroku is near and dear to my heart and I learned a lot about the power of developers through that time. After that, we invested in companies like Stripe and Twilio and another company called Sourcegraph that's working on “code intelligence” again to help developers accelerate writing software. Through these experiences I was lucky enough to meet Edith and hear what LaunchDarkly was doing. It felt like it was the perfect continuation of that trend. It’s a piece of technology and a solution that helps developers, but ultimately unlocks so much value across an organization and could have a profound impact on how they think about their business.

What separated them from the other investments you were thinking of making in the space?

The things I look for when we find these developer-facing businesses are indicators that the projects have impact not just within the development organization, but with other functional areas. By changing the software development lifecycle, these companies can end up having repercussions that affect product, marketing, and even senior level decisions how a company runs its business. LaunchDarkly was an amazing example of that, through the idea of feature flagging: the ability to transform the velocity at which you could release product; the ability to give product managers control to deliver specific features to individuals; the ability for marketing to be able to provide early looks on functionality. These are interesting, profound capabilities that span across an organization. Maybe the most exciting thing to me is, we talked to one of their early customers during the due diligence. It's a very successful, large company today, a brand name. We talked to the CEO who was not only aware of the impact LaunchDarkly was having on the organization, but talked about how it impacted the way he managed the business. It changed the way he thought about what his team could do. I was incredibly excited when I heard that, because that’s the way you create massive value and have the opportunity to build a significant business.

What are your thoughts on Alchemist in general?

I love what Alchemist is doing. I think it’s clear that when Alchemist got started, there was a dearth of opportunities for entrepreneurs thinking about enterprise businesses to find mentors and advisors and organizations that could them to help them grow those ideas.  Ones that understand the nuances associated selling to enterprise buyers. There were things like this available to consumer and more consumer-like enterprise businesses, but there were very few people that could act as a resource for entrepreneurs who wanted to build traditional enterprise businesses. I've heard time and time again from the people that go through the program just how much value they're getting out of it. I don't want to suggest here that building a consumer business is easier than building an enterprise business, far from it. They're very hard, but they're very different. As a young entrepreneur, when you think about selling to businesses, there's some realities you just have to know. You have to understand what it means to build an enterprise-grade product. You've got to understand what it takes to market to enterprise buyers, and you have to understand what it takes to build and manage a sales force that can sell to enterprise buyers. Having an organization that helps young entrepreneurs understand the importance of all those things and what it means to do that is invaluable. I view it as a pretty unique entity in terms of what it's doing. The entrepreneurs that have been a part of the program say it was incredibly helpful.

What’s the size of Redpoint, and how does it compare to other funds of similar stage in the Valley?

We’re a unique animal in that we are always actively putting money to work out of two funds simultaneously. We have an early stage fund that is $400M focused on Seed, primarily Series A and occasionally Series B. We also have a $400M early growth fund that is focused on Series Bs and Cs. As a result, we span from Seed all the way through mezzanine financing with these two funds totaling $800M.It makes it a lot of fun for us. Our approach in the way that we we work with entrepreneurs, is they do not need to worry about which fund the money is coming from. Here we're going to work every deal exactly the same with an identical approach to thinking about engagement with entrepreneurs and the value that we want to add to them. We just have two pockets we can pull from.

What size checks do you typically write and how is that structured?

It's a hard one to answer given our stage-agnostic approach.  We write seed checks of a few hundred thousand to grow checks well north of $30M. The most important thing for us is to not try to force an entrepreneur to raise an amount of money that isn’t in the best interest of their company.  Ultimately, we want to do what is in their best interest and the good news is we have the flexibility to support a couple of smart people with an idea all the way up to a company well on its way to an IPO.  

What stage do you prefer to enter into, if there is a preference?

The earlier we can be involved with great entrepreneurs, the better, but again we are primarily interesting in working with great companies regardless of stage.  

Does your fund have a specific focus?

Broadly speaking, Redpoint invests in disruptive ideas across both enterprise and consumer technologies. That being said, with the rise of things like artificial intelligence and what's happening within SaaS and cloud, we're finding ourselves moving into adjacent markets. We've been spending time understanding how things like machine learning can transform the drug discovery process and the delivery of healthcare. We are spending time in areas like space and robotics. We have a pretty wide aperture. The common denominator is we are looking for bold ideas.  Companies that are building innovative technologies and that have the chance to fundamentally transform a market.

How do you think your fund differentiates itself from other funds?

First and foremost, it starts with entrepreneurs. Few jobs are as challenging as that of a founder creating and scaling a business; our team’s job is to work collectively for our founders and help them build successful companies. We view ourselves as going to work for the entrepreneurs, as opposed to them going to work for us. It’s a privilege.  

As a firm, we’re very collaborative in nature and we take a team-based approach. Most of our team have been former operators or founders ourselves and we have a deep empathy for the entrepreneur’s journey. We try to operate like a startup ourselves with a small and nimble team. Our firm’s 19 + year legacy gives us a fair amount of experience, perspective and connections, as well as a foundation for doing what’s right for the entrepreneur.   

The last thing I would say is that we really have deep domain expertise and we invest a lot of time and energy in building the networks and relationships around the thematic areas we invest to make sure that we can make a difference. This allows us to see over the horizon, and help our companies do the same.

How do you think you individually differentiate yourself from other VCs?

I try to be the best possible partner that I can be. I've been lucky enough to be a part of a lot of great companies and to have had a chance to work with a lot of great entrepreneurs. I hope that when they sit down across the table, they'll say “This is somebody who helped me, who had my best interests at heart, and who was great to work with.”

The other thing is just try to be a good human being. This is a long term relationship and we’ll be working with these folks for many, many years. The last thing that an entrepreneur needs is to be dealing with somebody that isn't 100% aligned with them and has their best interests at heart. I try to make sure that I'm always looking at the world through their eyes and trying to be as helpful as I can.

What makes an investment compelling for you?

It starts with the team. We spend a lot of time in our diligence process assessing whether or not we think a team has the opportunity to build something really differentiated and transform whatever market or industry they're part of. That is top of our list, bar none. We want to work with good people that we think are going to do things the right way. Second, we look at the markets the companies are operating in. We want to be going after big markets and taking bold bets. The last thing is we look for products and technologies that are differentiated and will create defensible moats making  it difficult for other people to replicate.

That used to stand primarily on the basis of high quality products and good technology. Increasingly, a lot of businesses we look at have other moats like network effects that can be extraordinarily powerful for businesses. In enterprise increasingly there are communities that get built up around some of these technologies. We put that all together and try to find things that are special and where we feel we can add value.

Bottom line is, we want to work with great people, and they come in all different shapes and sizes and all different experience levels. We've been fortunate to work with a lot of folks who are building amazing businesses as their first job. We've also been very fortunate to work with experienced executives who are doing it for the second, third, or fourth time. In the end, we don't think that talent comes in one shape or size or profile. At some level, to be a great entrepreneur, it’s some magical combination of intelligence, grit, determination, and experience. There's always a different combination of all those things, but in the end we think that people that have a vision for the future and have the ability to get it done are what matters the most.

Is there was a piece of advice that you could give to founders fundraising, that doesn’t get shared enough, what would it be?

The more honest and open and transparent you are, the more likely you're going to find somebody who is investing for the right reasons. I encourage everybody to make sure that you're not trying to manage the conversation. As an entrepreneur you need to be able to sit across the table from your investor and lay it all out there - the good and the bad - and get an honest reaction. It gives me great comfort when founders name the issues or challenges in their business because I don't feel like I'm being managed and I don't feel like there are things I don't know. Obviously, things are not always going to be going up and to the right. Every company has things that need to be worked on. Once I know what the issues are, it's much easier for help the entrepreneurs. There are a number of founders in these conversations that feel like they need to come off as infallible and “we've got this, it's all good.” No business is like that.

Which investment are you most proud of and why?

I love them all the same! But Heroku is special to me because it was my first investment.  It wasn’t obvious at the time, but I loved the founders and their vision.  Seeing their success was incredibly gratifying. As with all our founders, I am forever grateful to have had the chance to work with them.  

What areas are you excited about now and in the future?

It's a broad question and I don't think I'll be exhaustive in my answer. I will tell you where I spend a lot of time personally. I believe in this move-the-cloud-native movement - this move away from traditional monolithic to microservices and from on-premise to the cloud.  These moves are having profound repercussions it has in terms of software development, deployment, and operations, and also the impact it has on a company’s ability to move faster than ever through software. You can look at every tier of the application stack and realize that they're going to be fundamentally changed. Many already have been, but there are many things left to do. I'm a big believer in things which help organizations move to the cloud. I’m a profound believer in the power of the public cloud and the long term trends there. All the solutions that help companies begin to make that migration, I'm very excited about. We continue to be interested in SaaS in the way that it’s moving beyond broad horizontal applications and into more vertical solutions that do more than just automating a business process, but really help people do their jobs better by delivering insight. We continue to be excited about the long term trend trends there. And as I mentioned earlier, we're very interested in broad applications around AI and ML and in particular how these technologies might disrupt industries typically not addressed by venture capital.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1323352 2018-09-20T16:00:04Z 2018-09-20T16:00:04Z An Interview with James Cham, Partner, Bloomberg Beta


James Cham is a venture capital investor with Bloomberg Beta, a firm focused on investing in the future of work. James invests in companies working on applying machine intelligence to businesses and society. Prior to Bloomberg Beta, James was a Principal at Trinity Ventures and a VP at Bessemer Venture Partners, where he focused on consumer services, enterprise software, digital media; and served on the boards of CrowdFlower, Open Candy, LifeLock, ReputationDefender, Sonic Mule, and BillShrink. He was previously a management consultant at The Boston Consulting Group and a software developer. James received an MBA from MIT's Sloan School of Management and Computer Science degree from Harvard.

How did you get into the world of Venture Capital?

After the startup that I was a part of got acquired, I went to business school. A good friend of mine introduced me to a firm called Bessemer, where I got my introduction to venture capital and how I ended up investing in startups.

And before Venture Capital you were a software developer?

That's right, I was a software developer in the late 90s to early 2000s. I was part of that transition from client-server over to web-based, enterprise applications, and I wrote a bunch of mediocre code and made a bunch of bad design decisions that other people suffered for as a result. So I’ve been through enough cycles to least understand what that feels like from a potential customer perspective.

Why did you invest in LaunchDarkly?

Let me take a step back. When we raised money from Bloomberg to start the fund nearly five years ago, one of the core claims was that we are living in a world where everyone's a knowledge worker. In that world, we should look at the best knowledge workers around. We should copy their techniques to find ways for them to scale what they're doing. And of course, the best knowledge workers in the world are software developers. This is in part because some of the best software developers are a mix of lazy and smart -- they spend all their time avoiding working on applications and instead work on frameworks and systems infrastructure. So broadly, that is what we’re excited about.

LaunchDarkly is exciting for two core reasons: One, there was an immediate sense of recognition of a problem. When I first heard Edith pitch the idea, I thought “Oh my goodness! I wish this existed when I was being yelled at as a software developer or when I was managing projects.” There's a sense that this should exist and this is the right way to do something. I think most software developers do this. You build your own bad bug-tracking system or slightly lame issues-tracking system. And I had done something like a features flag product for some other project, but I didn't call it that. There was a sense that Edith understood this and saw this more clearly than I did. That’s one excitement.

And then there's the other reality which is the excitement of seeing a leader like we did. There's a point when you meet her and say, “Oh, she's not just someone who has built something interesting, but she’s someone you can see leading something important.” That’s another important part of what made it exciting for me. As I've gotten to know her better, that’s only been validated more and more.

You met LaunchDarkly through Alchemist. What are your thoughts of Alchemist in general?

The thing that is most helpful about Alchemist is that it’s more systems driven. The people around it are quite credible and thoughtful. You look at the set of advisors: These are people who aren’t really famous and lightly involved, but rather accomplished and very deeply involved. From my perspective, that makes the process of diligence and validating people much easier.

There’s always a sense about Alchemist that you’re being as positive as possible about the opportunity, but at the same time you don’t lie. That's an important thing for an investor and really helpful.

What is the approximate size of your fund? How does that compare to other funds in a similar stage?

As the markets are fragmented, even in the earlier stage, judging how we compare to other funds does become more complicated. But the core physics of our first fund was $75M, and the second fund is also $75M. Our first check sizes range between $100K to $1M, and we participate anywhere from friends and family rounds to right before the Series A.

Does your fund have a specific vision or focus? I know you've touched on the future of work prior, but is there more to that?

We talk about the future of work, in part, because historians of science would say that it takes two generations of managers for any new technology to really make an impact on the economy. At the start of our fund, we were twenty years into the Web -- networked computers, which is another way to think about it. We were convinced that it is only now we’ll see massive changes in the way people work, because now you have a bunch of people creating businesses that are suited for the Web.

Within that vision, we have a focus both on productivity for knowledge workers -- we see a lot of opportunities to integrate and learn from developers -- and the way software ends up changing the way that people do business. New tools will be required to support this new kind of business, which include developer tools up to enterprise software.

We also believe that machine learning, model building, and AI in general are different than normal software development. I think they have profound implications that we haven’t understood yet, not just on all the cutting edge research we’ve done, but especially around the way that people make good software and machine learning models. Machine learning model building is different than software development. The economic characteristics are different, meaning machine learning will give rise to new business models. So somewhere out there, there’s going to be a person that is the Bill Gates or Marc Benioff of machine learning. They are going to do a mix of marketing, technical, and product insights and come up with a different way of providing machine learning or AI-driven businesses in a different light. They are going to charge in a different way or sell it in a different way. That’s the innovation or change in the way that people do business that we’re most excited about, and where we spend a lot of time.

How does your fund differentiate itself from other funds?

On the one hand, the money is a commodity. The money is the same, and so the way you differentiate is you bundle different services along with it. Some of that is the personality of the partners and the way that they relate to other people. A part of that is also a set of things that we focus on. I think, we think through more than other firms ways that founders can make a dent in the universe through the way they talk about themselves. On that side, we’ve thought a lot out. And we work with our companies a lot around that.

So much of it depends on the specific relationship that each partner has with the founder that that investor has invested in, especially at the seed stage. There aren’t magic formulas.

How do you individually differentiate yourself from other individual VC’s?

The right way to compete along those lines is not to compete. Instead, I’m most interested in angles that people aren’t thinking about yet. And I’m most interested in thinking through angles that are poorly understood.

So if someone has just another generic SaaS company that’s growing at a certain percentage, then I'm probably not the right person for them. An old friend of mind would say that there’s two types of VCs. There are VCs that if they weren’t VCs, they’d be bankers, and others who are VCs because they spent too much time pitching. I’m definitely part of the second camp. There are a whole set of ideas that should be enabled and would be if someone stuck their neck out and said they believed this founder could create something special and make the world better. And that’s what I try to do.

​What makes an investment compelling for you? Is there something in particular that makes an investment more compelling than not?

There are all the things that people talk about: traction, the team’s experience, potential, etc. I think those things are all really important, but the thing that might be under appreciated is that core insight. Sometimes the founders don't understand what the core insight is. There is nothing quite as exciting as sitting with a founder and discovering together what actually makes them special. And oftentimes that core insight can be communicated in a paragraph or it could take a lifetime to get there. For me, that’s what I'm looking for that. It’s going to be in areas where I have enough preconceived notions that someone could surprise me.

What is the number one red flag for you that would make you pass on an investment?

The moment I feel like I can’t trust someone is probably the number one reason why. When it’s close or we thought we should have invested, that tends to be the number one surprising thing about most folks that we pass on. Investing in a company is not something you take lightly. We take it very seriously and it’s a relationship we take very seriously as well.

What separates the great founders who get an investment from you vs. the good founders who don't quite make the cut?

There’s a way in which the best founders help you believe. Whether it’s helping the investors believe or first customers or the first employee or the co-founders. And that way of getting someone to believe, it comes in all sorts of ways. It’s not generic. It comes in many sizes and forms, but that ability to impose your will on the universe. It only works if you can convince other people.

Would you be more likely to fund a very experienced team with a mediocre idea or a team of novices with an amazing idea?

Nuance matters a lot here. I think that there are plenty of times when the very smart, experienced team can take a mediocre, initial idea and because they are so customer-oriented or technically visionary that they end up building something better, smarter, or more interesting. However, generically, I hunt for people who have extraordinary insight and how they get there. The insights do not have to manifest themselves with the first product, but they manifest themselves somehow that makes them extraordinary.

Is there any piece of advice you would give founders who are fundraising that you think does not get shared enough?

I think founders forget how much power they have in a situation. There are cycles that founders get in where they end up feeling like this is just another boring sales call. But what the founders are doing is they're sharing their most precious things. They're sharing things that they probably care more about than almost anything else in the universe. When they pitch, they should treat it that way. That investors are lucky to get a view into this. The moment the founder forgets that, humans can smell it. You have to continue to be resilient and continue to believe because investors, although we do it through a financial instrument, at the core, we’re declaring we have faith in someone and we have enough faith that we’re putting our money and our goodwill behind it.

If you think about Edith and the way that they were together and the way that they communicated and seemed to take what they do seriously, even when things are difficult, that’s the sort of thing that an investor is looking for.

What areas are you excited about now and in the future?​

I’m excited for when things that we call AI-related start being machine learning-related and get boring. When everyone understands how to engineer a bunch of problems, things get boring, and that's when you end up with a lot of product innovation. I’m very excited about that!

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1311933 2018-09-13T16:00:04Z 2018-09-13T21:59:53Z An Interview with Edith Harbaugh, CEO, LaunchDarkly, Alchemist Class 8 (Ocho)


CEO and co-founder of LaunchDarkly Edith Harbaugh has raised over $30M in funding from investors at Uncork, DFJ, and Redpoint. She has more than 10 years of experience in product, engineering and marketing with both consumer and enterprise startups. Edith was Product Director at TripIt, where she launched TripIt for Business and ExpenseIt. She holds two patents in deployment. Edith earned a BS, Engineering from Harvey Mudd College and a degree in Economics from Pomona College. She enjoys trail running distances up to 100 miles.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1314938 2018-08-30T16:00:05Z 2018-09-13T22:00:34Z Making Outbound Sales Work


First impressions matter. When you're a startup, a single email with the right message can lead to a lighthouse customer or a new investor. Yet because so many more cold emails result in no response or outright rejection than engagement, frustrated founders simply quit sending them. They shouldn't.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1313813 2018-08-23T16:00:04Z 2018-09-13T22:00:52Z Building a Talent Culture: Why You Need More Than Good Ideas and Funding

Great leadership is the difference between success and failure. It's why some good ideas take off and others don’t. To run a successful startup you don't necessarily need to be a brilliant leader, but you do need to know how to access the brilliance of your team.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1310473 2018-08-16T16:00:01Z 2018-09-13T22:01:11Z 5 Tips To Help You Navigate The Procurement Process Like A Pro


As a founder and mentor, I begin each week with pipeline meetings and the question: “What are the barriers to close?” I teach this method to Alchemist startup founders to help them identify the barriers that can stall each deal. Too many first-time founders provide a forecast to potential investors without allowing for the possibility that procurement may stall or kill their deal. A deal is not done until it is signed. Here are 5 best practices that will help you navigate the procurement process like a pro.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1310212 2018-08-09T16:00:05Z 2018-08-10T02:57:51Z Seed Fundraising - How to get “Reservations” from Angel Investors


At the beginning of your seed fundraising process, you may have to wait several weeks for the first “yeses” from any investor. During this time, if you’re not getting any commitments your round can appear stagnant. Reservations from Angel investors can help solve this problem; as your round’s availability decreases it will put pressure on other investors to say yes.

Here’s how to secure the reservations:

Ask for Money

Most Angel investors turn down 90% of the meetings founders request, so if you get a meeting, you must directly ask if the investor is interested in investing.

Steps:

1. Wait until 10 minutes before the end of the meeting, then ask if they have any questions. For example:

“That’s a quick overview of AcmeCorp - do you have any questions?”

2. When you’ve completed the questions and/or when there’s 5 minutes left, ask if they want to talk more about investing. For example:

“Does AcmeCorp fit within your investment thesis?”

“Is this investment something you might like to be a part of?”

“Would you be interested in investing in our current round?”

Ask Usual Check Size

If the investor expresses interest, the next step is to find out their usual check size. This will be an integral part of the reservation later.

Steps:

1. After the investor expresses interest, ask about their investment process, as this will give you an idea of the time they take to make a decision, as well as their usual check size. For example:

“What’s your usual process for investments like this?”

2. If they don’t reveal their check size, you’ll have to ask directly. For example:

“What’s your usual check size for these investments?”

“What size of investment are you considering here?”

“Do you have a fixed amount you usually invest at this stage?”

Secure the Reservation

Once you know the investor’s potential check size and when they will decide (roughly), it’s time to secure the reservation.

Steps:

1. If the investor’s check size, decision timeline, and other requirements fit with your plan, tell them you’d be open to having them involved. For example: “I’ve enjoyed our conversation and your approach seems to fit with our current raise”

2. Next, acknowledge they will need time (and perhaps further materials) to decide and ask for the reservation. This step is critical. For example:

“Should I hold that space for you while you’re deciding?”

“I will hold your spot, to give you some time to decide.”

“I usually hold space for investors while they’re in diligence, I’ll do the same for you.”

Once you’ve promised to reserve space for an investor, it would be wrong to give that space to another investor without fair warning. Thus, your round’s availability is reduced and all other potential investors start to feel the pinch of FOMO (fear of missing out). When new investors now ask for your fundraising status, you can respond with spoken for availability for example:

“We’re raising $500k and have 50% spoken for”

Practice these phrases before the meeting, and the early part of your seed fundraising will be much easier.

Thanks to Kaego Rust for her help on this article.

About Ash Rust

Ash Rust is a Partner at Alchemist and the Managing Partner of Sterling Road. You can find more of his writing about Seed Fundraising on Medium.

About the Alchemist Accelerator
Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1304972 2018-08-02T16:05:29Z 2018-08-02T17:00:02Z An Interview with Toni Schneider, Founding Venture Partner, True Ventures

A Swiss native who studied computer science at Santa Barbara City College and Stanford University, Toni Schneider started his career as a software engineer working on NASA virtual reality simulators. He went on to become a startup founder and CEO, and an executive at Yahoo!, before joining the True team as a founding Venture Partner. Toni is well known for his role as CEO of Automattic, the company behind WordPress.com. He helped WordPress become a globally known brand that powers over 30% of all sites on the internet. For his work, Toni was recognized at the Crunchies as CEO of the year.

When he is not running one company or advising another, you can find Toni in his VW van crossing the US with his family, coaching San Francisco Little League baseball, or tinkering with old cars.

How did you get into the world of venture capital?

I got into it first as an entrepreneur and founder, raising money from VCs. I did that for three startups. Then I switched to VC while also still being CEO of a startup. True Ventures is the only VC firm I’ve ever been with. One of True’s co-founders, Phil Black, was a close friend of mine. He was thinking about starting a new VC firm and asked me if I would be interested in being part of it. So when he started True together with Jon Callaghan, I said yes and dove in to learn from them how to raise money from limited partners and make venture investments as we pulled together True’s first fund in 2006.

That’s so interesting to be on both sides. You began on the entrepreneurial side pitching to VCs and now you are a VC. How do you think that transition helped prepare you? Does it help you identify what you are looking for in a company that you want to fund? What a red flag would be, that sort of thing?

It's probably both good and bad. The good part is that I was able to bring a founder’s perspective to how we structured True. Our goal was to be very founder friendly. I could share honestly what it was like to sit on the other side of the table from a VC. That helped in creating a firm where we really think of founders and entrepreneurs as our customers and where we do everything we can to provide a good service to them.

Another advantage is that when I look at startup teams, I have a good hands on feeling for their abilities because I’ve run several startups and hired and managed many startup teams.

The disadvantage is that it comes with biases. I had a certain experience as an entrepreneur and certain things that worked for me and certain things that failed. That very much shaped my thinking around startups. While it gives me a good point of view, I also have a harder time going outside of my own experience and being open to different approaches to starting businesses.

What for you personally makes a startup look like a good idea? What is something compelling to you as a startup you would fund?

For me it always starts with the team. I look for strong founder qualities, which in my mind are the ability to be very charismatic, and to have a really exciting, big, long term vision combined with flexibility when it comes to everyday execution that's going to be very zig-zaggy for a startup. There will be new challenges every day. So you look for somebody who's comfortable asking for help and being adaptable near term, but has an audacious long term vision that they don't waver from. The charisma and communication skills will help attract a lot of people to their startup.

Finally, someone who has a lot of depth in their area of expertise. This is something I always look for. As I dig into an idea, do I feel, “Wow, this person is three steps ahead of me and has really thought it through and knows everything about the space they’re about to get into”? Any good idea is going to have more than one team chasing after it, and I want to bet on the team that has a lot of depth.

There's a lot of emphasis for future founders on idea generation, but it honestly sounds like the idea comes second to more of the team, from what I just heard you say...

First step is to be in the right place at the right time for your skillset. There are other factors that play into it, but without the right people, none of it is going to work.

The second step is the product and the idea. The product needs to be unique and truly compelling and have a story that can be articulated in a simple way. What does the product do? Who is it for? What makes it unique? It's surprising how often founders can’t answer those three basic questions in a straightforward manner. I want to invest in a product that gets me personally excited, that I believe will have a positive impact on the world, and that will make customers say, “Wow, I want that, that’s different. That’s a totally new approach.”

For the third step, like everybody else in the VC business, I look at the market. Is this something that if it works out - there can be a ton of risk associated with, frankly we want a ton of risk - but if it works out, could it be a very big business? Is it a big market that seems ready for a massive change? That has to be in place as well, otherwise you can have an amazing team with an amazing product, but without big growth and revenue potential it won’t be a VC scale opportunity. That's not what we’re in business for.

What was the number one red flag that would caution you away from investing in a team or a startup?

On the people side, it's teams that don't seem to have the right chemistry or the right understanding of what their roles are going to be, or teams that don't have a track record together. That for me is maybe not a red flag, but definitely a yellow flag.

The biggest red flag usually comes up during initial due diligence. It happens quite a bit that I'll think “Wow, this is a really good idea, I'm going to dig in,” and when I do, I realize that there are already a bunch of teams doing the same thing and the idea quickly doesn't seem so original. It feels like more of a rehash or tweak of another idea. That usually throws cold water on a project for me. That’s the biggest red flag, that an idea isn’t that unique.

It's only one percent of startups go on to become really big. You really do have to filter out ones that you don't think are capable or have a clever idea.

Yes, and even when everything fits, even when you check all the boxes that I just described, it's still hard. Because nothing ever plays out exactly the way we plan and hope. Another filter we use at True is that we focus on one type of deal. We do two to three million dollar seed rounds. That’s it. If it’s something that is a really good idea with a good team, but two to three million dollars is not enough to get it off the ground or it’s already past the seed stage, we won't do it even though it might be a great opportunity. We are really trying to stay focused on one stage of investing, do it well, and have a whole portfolio of companies that go through the same stage so they can all learn from and support each other.

Seems like True has a specific focus on seed round innovative companies, what else do you look for?

We’re not thesis investors. We don’t have certain sector or certain type of business that we look for. We’re not a “SaaS fund” or a “Crypto fund”. We invest behind great founders and then double down when things are working. For example, we were early investors in Fitbit, a couple of years before hardware startups and connected devices became a trend. We weren't looking for that trend, we just liked that team and particular idea, and when we saw it working for them, we followed on with a bunch more hardware investments like Ring and Peloton. We follow wherever our founders take us. Recently, we've invested in robots, satellites, and biotech, which are all new areas for us. We try to be very open-minded about what the subject matter might be.

You really do try to treat founders and startups that work with you very well. Is that how your fund differentiates from others? There are certainly quite a lot of VC funds around here.

One thing that makes us different is that we invest earlier than the majority of VCs. We're really close to an angel stage, but we're a full service VC firm. We are there in the very beginning, often when it’s just two or three people with an idea, and we have our founders’ backs all the way through. Most VC firms want to see revenue traction and product-market fit before they even look at something.

The second thing we do that differentiates us is we are focused on the personal needs of a founding team, not just the business needs. We know what you will need as a founder, as a leader, to get really good at your job, to get through the ups and downs of doing a startup. If something goes wrong, we want to be your first phone call. We don't want to be the kind of investor where you feel like, “Oh God, something went wrong, how do I break this to my investors? I don't want to talk to them.” We hope to have a trusted relationship so that even when things don't go well, we're going to be there and help you through it.

Part of how we do that is to connect all the founders within our portfolio and they help each other improve. That's our founder network and platform. We have events and tools that facilitate direct, open, and honest collaboration. It’s optional, but most of our founders take advantage of this amazing peer network. I think it’s super valuable and quite unique among VC firms.

What made you to want to invest in Laura and her startup, Atipica? What made them stand out from the pack of other investments you were evaluating at the time?

Laura and Atipica really hit a lot of the boxes I mentioned earlier. She’s a very charismatic founder with a big vision, a great communicator with deep knowledge in the area of diversity, inclusion and hiring. She had spent several years working on the idea and product, talking to a lot of companies about their needs, so she had depth of expertise. We started working together a little bit over two years ago. It was still early days in diversity and inclusion tools and she was well ahead of many of the people we talked to. She had a small team, pre-revenue but she already had some pilot customers. So it was the right stage for us and we felt like our seed investment could help her build out her team, get the product launched, and get to the next stage.

The hiring and recruiting sector in particular was interesting to us at the time. We had just had a successful exit to LinkedIn with Connectifier, and I was and still am on the board of another investment we made in this space called Handshake. They’re in the college recruiting space and doing very well. So I was personally excited about hiring tools and got quickly interested in Laura’s vision to make the recruiting and hiring process become more fair and inclusive and help companies understand why they're having such a hard time building diverse workforces.

Is there any piece of advice that you would give founders who are up and coming next generation founders that you don't think get shared enough currently? Something that people are failing to focus on when they're thinking, “I want to become a founder”? Is there some aspect you see time and time again they forget and you would caution them to focus on?

Try and get as much perspective as possible. When I was an entrepreneur raising money, I felt that I knew and loved my team and my business, and I could pitch them all day long. But when I went into VC meetings, I was new at it and had never heard any other pitches. On the flip side, those investors had heard tons of them, yet I had no idea how I stacked up. I've definitely seen founders come through True who think they nailed it but they didn't. And I’ve seen founders completely hit it out of the park with us and were like, “Was that OK? I have no idea!”

My advice is to connect with other founders and see other pitches, or at least get some information on how high the bar is. I think that's how you get better. Don't try just work on your own idea, on your own pitch within your own bubble, but really try and see what else is going on out there, who's doing really well and connecting. How are they doing it? What's the subject matter?

A lot of what you're describing was actually the impetus behind why Alchemist got started. The founder, Ravi, felt the same thing, a lot of startups didn't really know how to compare and weren't really swapping notes and sharing. Alchemist has become like a community where you can share ideas, help each other out and that everyone is trying to get the best out of everyone else.

Exactly. The most worthwhile part of being a part of a program like that is learning from each other and getting perspective.

Then the last thing I'm really curious about is seeing how you get to see all the upcomings startups, tech products and services. What areas do you personally think are going to be the most exciting and you are most excited about in the upcoming near future?

I get that question a lot and actually I don’t know. Literally someone will walk through the door tomorrow with an incredibly exciting idea that we couldn't anticipate. All the super interesting things we have gotten really excited about are little bit out of left field. We're trying to be truly open to new people and ideas because our next great investment can come from anywhere.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1306513 2018-07-27T22:55:03Z 2018-07-27T22:55:03Z An Interview with Laura Gomez, CEO, Atipica

Her family immigrated to America when she was eight years old and settled in the Silicon Valley area. Shortly afterwards, she got an internship with Hewlett Packard. No one at her internship looked like her, and she hated it; it made her want to stray away from tech. However, her parents — who’d come to the U.S. to make a better life for her children — saw that tech would be an incredible opportunity and pushed her daughter to continue. Determined not to let the industry make her into a victim, she decided she’d work in tech, “whether the industry embraced her or not.” She believes she made the right choice going forward with tech; now, years later, diversity is dominating the conversation in the industry. Since then, she’s worked at huge companies like Twitter and YouTube, helping them translate and localize their applications for a global audience. Her latest endeavor, Atipica, helps tech companies find and hire diverse candidates; says she’d rather fail trying to solve the problem of diversity in tech than to never tackle it. Laura has raised $2M in seed funding led by True Ventures.

In order to get a more in depth look into Atipica and the mind that created it, we conducted an exclusive one-on-one interview with the company’s founder Laura Gomez. We pushed for answers to questions that people often want to ask Silicon Valley’s next-gen entrepreneurs, but seldom have the chance. By the end of this snapshot, we hope you have a sense of this amazing founder’s story and a few lessons to take away for yourself.

What exactly is your startup bringing to the marketplace?

What we bring to clients, investors and or our own team members is thinking of AI in HR in a more thoughtful and inclusive lens, powered by data and machine learning in the workforce. While there are many tools out there for HR, we are the only ones thinking of it as a holistic, inclusive solution and building it with a diverse team.

What was the impetus behind creating your startup?

The conference I just came from was actually MC’d by a former human resources business partner at Twitter. While technically I do not have any direct HR experience, I have worked very closely with HR throughout my career. Regarding the starting idea, it began with me thinking of a thoughtful and inclusive way that we can better understand diversity at the top of the funnel so that we can apply what happens to diverse employees and what doesn’t, and try to move away from anecdotal approaches to diversity and inclusion.

What is the most challenging matter you as a startup are currently facing?

I think the biggest hurdle is people not only picturing Atipica as a solution for social impact and diversity, but seeing it as a business intelligence tool that is adaptive to the dynamics of the workforce, which includes different genders, races, ages, and other kinds of diversity. The challenge is understanding the market outside and how to position ourselves, and getting people to not just thinking it’s a social impact and diversity solution, but rather that it’s a business intelligence technology that’s helping businesses adapt to what the workforce looks like now and what the workforce will look like in 5 or 10 years.

Can you tell us a little about your background before you started your startup?

I’ve been in tech since I was seventeen. I had my first internship at Hewlett-Packard, and since then went and studied in college. I didn’t really focus on computer science because I felt a lot of the imposter syndrome. After college, I joined a lot of early stage tech companies all at various stages of growth. While working at them I saw a need for more diversity.

What previous experience or situation do you feel best equipped you for your current role?

Growing up I always had a hard time assessing myself and my skills, but I also loved languages and loved reading about and interacting with new technologies. It wasn’t until I was in my late twenties that I realized that there was a natural intersection between the two, called localization. As I continued with my interests, I realized that technology could help me assess career paths and even help companies better understand the skillsets of people. That is something I want to incorporate into Atipica as well. How are people assessing themselves, how are they intersecting their skill sets with their own mindset and passion in the long run?

If you could go back to the first day of your startup, what advice would you give yourself?

Be patient with the fundraising process. Patience in understanding the complexity of what it takes to get funding is fundamental to becoming a founder. While people do usually want to be patient and not force it, the process requires a thorough understanding. It’s really not just the waiting that’s difficult, but you need to have patience in understanding the process.

What made you apply to Alchemist? Why not others?

A former coworker from Twitter is an Alchemist alum so I decided to consider it. I started researching, and I found Alchemist was considered the best accelerator. I then reached out to a friend who knew Ravi so that they could introduce me to him. The rest is history. Since joining Alchemist I actually made one of my closest friends by going through the program. She’s also an Alum. I saw the success of Alchemist, the prestige, the thoughtfulness of the program that Ravi had built and it made me think: “This is where I want to be.”

What was the most valuable thing you took from being a part of Alchemist?

Learning how to sell to enterprises. My whole career, I had only ever sold to consumers. I think the enterprise component allowed me to better understand all the components that make up enterprises in general. Obviously there’s an emphasis on revenue, but there’s also an emphasis on positioning and on the value to the client. Being better able to see through the lens of enterprises and how they look at startups was very helpful.

Can you talk about a time in which you thought all hope was lost and how you made it through that?

It happens to founders, if not every day, at least once a week or every month. This month alone it has happened to me twice. The main one had to do with someone that I thought was going to lead my round of funding, but it just got to a point where it just didn’t seem like it was going to work out. They had their own concerns about the business, and I had my own concerns about aligning myself with their values. I think it was one of those things that should have been addressed and discussed earlier on, but those are the types of things that happen, and I learned from it and have moved on.

I personally am a big fan of acknowledging the things that I can’t control and then focusing on the things within my control, plus by doing that it helps me not go into a rabbit hole of “oh my gosh I can’t believe this happened” or “poor me” victimization. Since I’ve started focusing on that, people have noticed how much happier I am. I feel more in control of my life and my startup. Always make sure to be grateful for everything. Even for example if you meet with an investor and they decide not to invest, thank them and walk away with gratitude that they were willing to meet with you and that you were able to learn from that. Being grateful in life opens so many doors and will never hurt you.

What entrepreneurial lesson or skill took you the longest to learn or are you still learning?

All entrepreneurs, whether they know it or not, are going to face some sort of ethical dilemma. It might be who they take money from, what they’re building, who is it going to affect. I have had to learn how to handle those dilemmas and to stay true to who I am. This skill is especially important right now when we have big tech companies being held accountable for various intrusions of the democratic processes or how they’re building their product and their businesses. Practicing ethics and integrity is something that I continue to learn each and every day.

Do you have any advice for female or minority founders?

Yeah, definitely! I actually just met with a female venture capitalist this week to see if she had ever led a preemptive Series A round. I asked because I really wanted to know if it was true or if it was just my own bias, but I had never heard of a woman or a person of color that has been a part of a preemptive Series A round. That being said, I know many male founders that have recently closed preemptive rounds just by talking to an investor. I think we need to acknowledge the systematic discrimination — men can get a $10M term sheet from a coffee, but not female or underrepresented founders. How I stay balanced is knowing that I can only control my own company and my own strategy when it comes to fundraising and not any external factors like who’s getting funded and are they preemptive or not. However, if there is a trend where minority founders aren’t being treated fairly, you have to acknowledge it and hold the industry accountable.

Has there been someone that has helped you along and that you don’t think you’d be here if it wasn’t for them? How did they do it? How did you find them? How did you build that relationship?

Yes, it is a VC friend of mine named Freada. She was one of the first people I ever pitched to. When I pitched to her it was horrible. I wish I had recorded it because it was absolutely terrible. But all of the partners and associates actually gave me really great feedback. I met with her afterwards, and she told me to focus on what I really wanted to make and then to build that well and find people who are willing to buy it and then come back to them. I took her advice and seven months later met my lead investor through her. And her firm, Kapor Capital, became an investor as well. So I definitely wouldn’t be here without Freada.

Did you already know her or how did you meet her?

I didn’t know her. I actually just randomly reached out to one of the principals, who is now one of my closest friends, there at the VC firm that I kind of knew of. I reached out and I said “Hey do you have time for coffee?”, and she said yes, but asked me if I’d rather meet with her coworker Freada because she was really passionate about what I was trying to start. She eventually became my mentor and colleague and investor. As a founder, you need to be willing to just put yourself out there and ask to meet people.

What constitutes success for your startup in the next 12 months?

I want to build a company based on values, integrity, using AI and machine learning to coach people rather than trying to automate and replace people and their skill set. I want the world to know that not all tech companies are trying to replace people and that not all artificial intelligence is biased; and I really want them to know that there’s a company out there thinking of thoughtful and conducive ways to use this technology to help the current workforce.

What constitutes success for you personally?

Success for me is having a proud legacy to leave behind. No matter what happens, I have met amazing people who really believe in me and my mission. At the end of the day I’ve done great work and built something I really believe in and am proud of. I have two nieces and if they ever read about me and what I’ve done, I know they’ll be proud.

Are there any insights you have learned that you want to share with the next generation of entrepreneurs?

I would tell them to stay true to their convictions. Whatever you’re building, make sure to find a support system. Don’t think it’s a weakness or a sign of desperation to ask people for help. Make sure to ask people for support, ask for advice, ask for opportunities. I believe that most people out there are good people and are willing to help, and if they’re too busy and aren’t willing to help, then you shouldn’t take it personally. Don’t be afraid of rejections, but rather be thankful for each and every opportunity that you’ve been given, and that will make a big difference.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley — including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1303790 2018-07-19T15:50:43Z 2018-07-19T21:00:23Z Checklist for Running Your First Board Meeting


A first board meeting is a big and life changing milestone. As founders, you survived weeks of due diligence, followed by a term sheet and then a wire of a few million dollars. Now it is time to be a CEO and experience and run your first board meeting with the investor or investors who sit on your board and blessed the deal.

It can be overwhelming. Here are a few coaching tips, based on my experience as a board member, to help first time CEOs be prepared and maximize the limited time you have with your board.

Checklist For Your First Board Meeting:

  • Get On Calendars: Executives’ calendars fill up months in advance. Remember that you are asking for 3 hours of a partner’s time, several times a year. In some cases, investors will have to fly in for the meeting. As a best practice, ask one of your board members’ administrative staff to own responsibility for scheduling the meetings.

  • Pick the Best Dates: The board meeting should take place after the quarter ends. This gives your finance and sales team enough time to close the quarter, giving the complete picture of sales data. Your cash runway is a key metric. Missing one deal could have a big impact. Having board meetings after the end of the quarter ensures you have the actual bookings number. (Note: most boards also have standing calls during the quarter.)

  • Share Decks: Email your board decks at least 72 hours in advance. This will help the board be prepared to ask meaningful questions and give feedback. Board members might also request that you pull additional information for the meeting. Emailing decks ahead of time gives you and your leadership team a few extra days to meet any such requests.

  • Use the Preferred Template: Ask the lead investor if they have a template that they would like you to follow. Chances are they sit on multiple boards and have a preference how they like to review the data. Once you have the template, share it with your leadership team. Have them fill out their section. For example, Sales, Finance, Product, Operations will each have their own slide or slides. Each section should start with a high-level overview of the insights and learnings of the quarter.

  • Prioritize Board Discussion: Always have two or three meaningful topics that you want to discuss with the board. Interact with the board as you prepare your slides. They are a sounding board for what you want to cover. Remember they have done this before and can only help when they know what problems you are trying to solve.

  • Leave Time for Governance: At the end of each board meeting, you will do the housekeeping: approve stock grants, minutes and other items that the board needs to vote on. Always have the most current cap table handy. That gives the board perspective on the impact on the employee option pool as they approve grants.

  • Hold a Dress Rehearsal: 24 hours before your board meeting, meet with your leadership team and do a dress rehearsal. It is important that everyone is on the same page. This might be the first board meeting for them as well.

  • Take a Breath: Congratulations on making it this far! Give yourself and your team the credit you deserve for the huge milestones of a Series A raise and first board meeting. There’s a vast amount of work ahead, but this is an achievement to celebrate.

About Darren Kaplan

Darren Kaplan is the co-founder and founding CEO of hiQ Labs (www.hiqlabs.com), a data science company, informed by public data sources, applied to human capital to make work better. Mr. Kaplan is an Alchemist Accelerator mentor, working with Augmented Reality, Cyber Security, and HR enterprise SaaS startups.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1296323 2018-06-28T14:55:33Z 2018-06-28T14:55:33Z Using Design to Inspire Disruptive Thinking

Image result for design principles

Emotion factors into customer experience, and as a result, into purchasing decisions. A customer’s experience isn’t just about features, it also includes how the product or experience makes them feel. It’s the moments of delight a customer encounters, and also the overall feeling they take away after interacting with your product.

Great customer experience is why travelers opted for Virgin America when United and American Airlines offered more flights per day. The Virgin experience, and the brand’s unique personality was ultimately more appealing than other airlines’ “feature” set

Investing in design to create an experience, rather than just a product and feature set, can be a key element of a company’s success.

Design is empathetic

Design can be seen as abstract concept. Robert Brummer, industrial designer and founder of SF-based design studio Ammunition has said: “Everyone is a designer.” What he means is that all of the people involved in bringing a product to life (the engineer, the manufacturer, the product manager...) need to be bought in to the design vision since they’re executing on different parts of this shared strategy.

Empathy is critical for design success. When you understand the context of a product's use (and how the person using it feels), you make really important discoveries. Understanding your users doesn’t just mean interviewing them––observation can be even more revealing. Observations uncover insights that interviews may not because users will often tell you how a process is supposed to work, rather than show you how it actually works.

To ensure that every decision reflects the best user experience, startups can keep these key principles in mind:

Five Key Principles

  1. Make it simple – Find a way to make someone's life easier, and maintain your focus there. It takes discipline to keep things simple, but focusing on doing one key thing really well could be a differentiator.

  2. Inspire delight – Create efficiency around a pain point. Help users complete something in an engaging and compelling way.  

  3. Exhibit craftsmanship – Pay attention to details. Think about going to a Disney resort:you instantly become part of a crafted, well-orchestrated experience.

  4. Deliver unique value – Avoid getting trapped in incremental improvement. Be sure you're focused on doing something unique and different. The NEST thermostat is a great reminder that there are opportunities for  breakthrough innovation even for everyday household objects.

  5. Focus on human goals – Understand your customer's world. Take time to understand who your users are.Don't trust internal opinions only because your perspective may not reflect the greater population.

A design-focused process

Design-driven companies use collaborative teams to get to disruptive ideas faster. Product management, product marketing, and design  should work together from day one. Here’s an outline of a development process that puts your users first:

  • Discovery – Focus on your customer development work to uncover your users’ needs first.

  • Conceptual design – Use the data you discovered to ideate upon possibilities.

  • Detailed design – Narrow your scope. Sketching, wireframing and prototyping, and then sharing these prototypes can help you get specific and disrupt assumptions.

  • Implementation – Discuss tradeoffs and ensure that with every change you’re not compromising the overall experience.

  • Post ship – Go back and talk to your users again. You may find new opportunities for the next version.

Find the right people

For small companies unaccustomed to hiring designers (and other user experience professionals like researchers, prototypers, or writers), finding the right people can be challenging. Design is an iterative process, so whomever you hire should be willing and able to work with you through a development process, listen to feedback, and make changes.

Communication is key. Your designer should be able to answer questions about why they made certain decisions, communicate to you why the overall design proposal works, and, as noted before, take constructive feedback. There’s lots of talented new grads and contractors who’d be motivated to work with startups and small companies. Working with a company where design is a priority at the earliest stages of growth should be an attractive prospect for designers. The benefits gained from designing an overall customer experience should prove invaluable to your business.

About Catherine Courage

Catherine serves as Vice President of Ads & Commerce User Experience at Google Inc. She was previously SVP of Customer Experience at Citrix Systems, Inc. where she led the company-wide customer experience initiative with responsibilities covering brand, social, web, product design, information experience and business process reinvention all to drive adoption and loyalty among customers, partners, and employees. She also served as SVP of Customer Experience of DocuSign, Inc. and the Founding Member of the experience team at Salesforce.com. She has twice been recognized by Silicon Valley Business Journal as one of 2011's 40 under 40 and 2013's Women of Influence. Ms. Courage holds a Masters of Applied Sciences, specializing in Human Factors, from the University of Toronto and Bachelor of Science from Memorial University of Newfoundland.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures/year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1295945 2018-06-21T13:48:16Z 2018-06-21T18:45:54Z Emotional Triggers and Investing

Directors like James Cameron, James L. Brooks, and Steven Spielberg are masters when it comes to understanding human emotion. In just a few short scenes, they can leave a whole audience in tears. They aren’t doing anything magical. They’re just appealing to the same human emotions we all have. As an Alchemist Accelerator Partner, I teach founders how to apply the same principles to fundraising. Get an investor emotionally excited and investment comes naturally. Try to beat them to death with numbers and figures, and you’ll just spin your wheels. Investors see thousands of pitches a year and fund a handful. If you want to win, you have to get them excited and snap them out of their default behavior of “no.”

Luckily for founders, investors are human too. So naturally, they have common emotional triggers that spark excitement, and ultimately, investment. In working with hundreds of founders, as well as raising $5.4million in seed funding for my own startup, I’ve identified eight emotional triggers nearly all investors respond to. By focusing on conveying these points to prospective investors, founders stand much better chances of raising capital and ultimately building great businesses.

The eight emotional triggers are:

  • Big Market

  • Rapid Growth

  • Why Now?

  • Unfair Advantages

  • Founder Strength

  • Founder Bond

  • FOMO

  • Confidence

Big Market

Investors live and die by their returns. The only way to get big returns is to invest in companies that have potential for big exits. For most investors, big market is a fairly binary measure: “Is the TAM (total addressable market) large enough to get me outsized returns on my investment?” they’ll be thinking. If the TAM is over $2B, you’ll get a check and if it’s less than $2B, they’ll likely have to pass—even if they really like you. So make sure you help your investors know exactly how big your market is by helping them do the math. If an investor is asking questions about how many customers are in your space or how big you think the market is, don't make them guess at the answers. Give them all the data they need to help them understand the TAM. This is especially important if there's a general perception your market may be too small.

Rapid Growth

The only thing that separates a startup from a small business is rapid growth. It’s literally the definition of a startup. The easiest way to demonstrate a rapidly growing company is to, of course, be growing rapidly, which typically means you’re adding users, customers, or revenue quickly. However, if you’re pre-revenue or pre-launch, growth projections can also help to convince an investor that your business is about to take off. If you've done the work in Excel to know you're adopting the best business model, now is the time to use it to convince someone else.

Why Now?

The why now question is really a two-part question of movement. Why has this business never been possible until now? What has changed now to make this business possible for the first time? After all, fresh ideas are nearly impossible so chances are others have come before you and failed. You need to explain what has changed that will make your vision succeed. Market movement creates opportunity. You see it. They see it, but only you know how your business can best seize the opportunity to create billions more for the benefit of both of your organizations.

Unfair Advantages

Investors recognize there are lots of smart people in the world, so becoming a successful company in a crowded marketplace requires more than just efficient execution. Describe precisely how you're creating a new earnings engine as well as any unfair advantages you may have. For example, if you have extreme domain knowledge around analyzing very large datasets or have worked in the industry you're targeting with your new product (e.g., healthcare), you should highlight that in your pitch.

Founder Strength

Building any successful company is hard. Building a multi-billion dollar company is nearly impossibly hard. When investors invest in your business, they can’t just believe in your idea. They have to believe in YOU. The best way to convince them is to show them a history of exceptional achievements. For example, if you have a new security technology, are you already an inventor holding patents or do you have a CISSP? Name drop. Make connections to your market. Mention achievements and show off logos. Be sure to share all of your founding team strengths.

Founder Bond

Co-founder conflicts are among the top reasons startups fail. It’s not talked about every day on TechCrunch, but investors see it all the time in their portfolios. So when a potential investor asks, “How did you and your co-founder meet?” he or she actually doesn’t really care about your cute story of growing up together and your mutual admiration of Pokemon. What the investor really wants to know is if you and your co-founder are committed to each other enough to stick it out through the ups and the inevitable downs of startup life. Founders who have bonded because they've known each other awhile often have an edge because (presumably) their relationship has already weathered some turbulence.

Fear of Missing Out (FOMO)

In the public markets, investors pay big money for the privilege of investing in stocks at a future date, at a current known price. It’s called option trading and it’s a multi-billion dollar market in the U.S. alone. In the private market, investors get “free options” all day by telling founders simple things like “We’re still discussing things internally” or “We’re still working through diligence items.” As a founder, it’s your job to move these maybes to real answers. The best way to do this is by appealing to what we all fear, which is missing out on something that might be amazing.

Confidence  

Investors are looking for founders with confidence. After all, if you aren’t confident in your own business, why should the investor be confident in your ability to make it successful? One of my fundraising mentors, Michael Carter, used to remind me, “It’s your job to be confident.” That haunted me during my own fundraising process, but it also provided a healthy reminder that confidence isn’t an emotion. It’s something you can project through tone, body language, and deliberate actions—even if deep down inside you feel anything but confident.

Emotion stays with us, making the discovery of the right human connection a significant factor in an evolving investment strategy. Talk. Uncover. Discover. Emotional triggers have the power to accelerate your funding success.


About Michia Rohrssen

Michia Rohrssen

Michia Rohrssen is the CEO of Prodigy, the fastest growing auto startup. He is also a founder/blogger at B2BFounder.com, providing actionable insights from a founder in the trenches. Before Prodigy, he served as Head of Growth at VentureBeat and CEO of Smarter Solutions. Learn more at https://getprodigy.com.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1291462 2018-06-08T04:00:00Z 2018-06-07T14:50:33Z Crossing the Chasm and Spinning Up the Web

Innovation has been difficult for traditionally successful companies. While leaders such as Intel, Oracle, and Microsoft spent time improving performance, entrepreneurial founders from Facebook, Google, and others moved in, creating new earnings engines by delivering faster and with less friction.

When I speak with Alchemist Accelerator entrepreneurs, I first describe the hierarchy of powers because it's how investors think about the origins of future growth. They want to understand how your company is going to win based on what power it will exert on the market:

  • Category power - Growth from category expansion where secular growth increases spending

  • Company power - Growth from competitive advantage (e.g., the 800-pound gorilla analogy)

  • Market power - Growth born from customer commitment and loyalty (think: Mac owners of the 1990s)

  • Offer power - Growth born from unmatchable offers

  • Execution power - Growth born from reaching tipping points

This last point -- reaching the tipping point -- is what founders delivering consumer technologies have to focus on just as business-to-business (b2b) startups have to put all of their energies into crossing the chasm. Each is a critical step to becoming a successful business or what accountants commonly refer to as a “going concern.”

Crossing the Chasm

When I introduced Crossing the Chasm in 1991, the idea of a technology adoption life cycle with different categories of enterprise technology buyers was novel. Now, most b2b founders recognize the value of aligning their businesses with innovators and early adopters (a.k.a. lighthouse customers).

At the same time, they realize reaching beyond those groups to the early majority is much more demanding, and can sometimes feel like a futile exercise similar to poor Sisyphus pushing his boulder up the hill. Yet when they find pragmatists, or what I refer to as a "bowling alley" group of users that share similar pain points, the business can successfully cross the chasm to “viable” and enter the tornado phase, when it seems everyone--from techies to Main Street conservatives-- purchase. After all, adoption is social, so the skeptics come along too, and that's when you have total assimilation.

Spinning Up the Web

Interestingly b2c companies don't cross a chasm, but rather spin up a motor with a variety of gears to generate a tornado. Two gears -- acquisition and monetization -- were what early investors questioned most. How were companies running experiments and based on results, tweaking accordingly. However, the other two--engaging traffic and enlistment behavior--have turned out to be longer-term predictors of success. “Spinning up the web” or a mobile app today requires viral engagement. When Net Promoter scores reach 9 and 10, you know you have a winner.

While not impossible, crossing the chasm or spinning up the web within a traditional business is hard because innovation can be distracting and require reassigning top talent. You, as an entrepreneur, can use their continued focus on performance to your advantage, executing on one of the framework powers to grow your business or be acquired by theirs. Getting traditional enterprises to effectively create new earnings engines is outlined in Zone to Win. For now though, startups like yours that can cross the chasm or spin up the web still have the edge.

About Geoffrey Moore

Geoffrey Moore is an author, speaker, and advisor who splits his consulting time between start-up companies in the Mohr Davidow and Wildcat Venture Partners portfolios and established high-tech enterprises, most recently including Salesforce, Microsoft, Intel, Box, Aruba, Cognizant, and Rackspace. Moore’s life’s work has focused on the market dynamics surrounding disruptive innovations. His first book, Crossing the Chasm, focuses on the challenges start-up companies face transitioning from early adopting to mainstream customers. It has sold more than a million copies, and its third edition has been revised such that the majority of its examples and case studies reference companies come to prominence from the past decade. Moore’s most recent work, Zone to Win, addresses the challenge large enterprises face when embracing disruptive innovations, even when it is in their best interests to do so. It’s time to stop explaining why they don’t and start explaining how they can. This has been the basis of much of his recent consulting.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1286848 2018-05-25T04:00:00Z 2018-06-06T20:18:59Z You Need Paying Customers, Not Free POCs, to Survive Your Fundraise

First-time entrepreneurs that are building an enterprise SaaS company and trying to raise money without having paying customers will typically find it difficult to raise capital. As an Alchemist Accelerator CEO mentor, I help founders understand this point as early as possible. If you want to survive, meaning close your Angel or Series A round to live another day, you must prove that customers will pay for a solution to the problem you are solving. That is table stakes in Silicon Valley.

Early Stage, SaaS, Enterprise Sales is Really, Really Difficult.

You don’t have brand recognition, customer references, case studies, engaging slides, or a fully functional product. And most technical co-founders do not have sales experience and would prefer to spend their time coding versus updating salesforce or talking to people.

Capital comes in two primary forms: paying customers and venture term sheets. Non-paying “proofs of concept” (POCs) are not customers. The Valley VC deal flow is massive so POCs with no path to revenue from small logos (companies with under 400 employees) will get a response that sounds like “come back in six months.” That is a major problem when you have only 90 days of cash and no salespeople.

Founders need to clearly understand their prospects’ buying and decision-making processes. Everyone knows your product is in beta, but you shouldn’t be giving it away for free. Founders need to know their worth and show the value of their products. It’s important to explain to early prospects that free trials equate to no funding to hire engineers to scale the product. Even worse, they lead away from a path to raise money.

Be honest with your first 10 potential customers. Let them know that you need a financial commitment from them and that they need to be a reference for potential investors. Listen carefully to their feedback when you make that ask. Do they have a budget to pilot new technologies? What are the barriers to your deal getting signed in the current quarter? Are they in the midst of a reorganization? Did a new boss just arrive? The signal will be high on your first call as to whether or not this lead has real potential. If a prospect tells you his or her company’s security assessment will take six months and the purchasing process another three months, believe that person and say thank you, don’t forecast them and then move to the next deal.

Your First 10 Logos Matter

Many founders sell into small businesses (20 – 400 employees) because they think the process will be easier. Logos matter and the first customers you attract are important. VCs call these lighthouse customers. They represent early market validation and big budgets. If investors have never heard of the logos on your traction slide, there’s little excitement to listen to your pitch. Similarly, if your first four customers are due to your friends or family network, investors will be

skeptical of your ability to cold call and introduce your new product/service in a compelling way outside of your immediate contacts. Remember VCs backchannel before they cut checks. They call their networks of lighthouse executives to get a sense of market needs.

Have A Path to Scale Early Customers

Investors will be interested in your traction. They know that your first few deals will be priced below market to get the relationship started. But you need to show them a path—how you are going to grow early customers from five-figure deals to six-figure deals. (In effect, showing now that you won your first deal to prove your value with one business line, how you will get the rest of the business.) Great founders set this path to scale at the earliest stage of deal. They do this by value setting at the beginning of the relationship.

So take the time to build a solid pipeline of customers not POCs. It’s easier to raise money when you have paying customers. Founders selling early-stage enterprise SaaS solutions should think in these terms: every $50K SaaS sales order should equal $300K in funding. If what you are selling has value, people will pay for it.

About Darren Kaplan

Darren Kaplan is the co-founder and founding CEO of hiQ Labs (www.hiqlabs.com), a data science company, informed by public data sources, applied to human capital to make work better. Mr. Kaplan is an Alchemist Accelerator mentor, working with Augmented Reality, Cyber Security, and HR enterprise SaaS startups.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1281987 2018-05-17T15:29:12Z 2018-05-17T16:00:01Z Lighthouse Customers: Four Best Practices


A lighthouse is a great metaphor, symbolizing safe passage ahead. Throughout my career, I've associated it with really important customers because they're the ones that help safely navigate small startups into burgeoning businesses.

Lighthouse customers are similar to anchor tenants in a shopping center. Others follow their lead. Lighthouse customers are your company’s champions (and hopefully become members of your Advisory Council). Lighthouse customers support your vision and have tremendous influence on your product or service roadmap because they've committed to you and you've committed to them. You’ll have other customers, for sure, but these lighthouse accounts are the shining examples of your software and service in action. They’ll be your references to investors. They’ll speak to analysts and press. They are your showcases.

That said, they don’t all have to be from the same industry. However, they do have to share the pain points your business is solving.

When it comes to lighthouse accounts, here are four things I tell the Alchemist Accelerator startups that I mentor to keep in mind:

1.     You're forming a partnership that requires commitment on both sides.

2.     Find big names that can be “company makers.”

3.     A solid ‘how many’ rule of thumb is 1:1.

4.     Companies do change.

Both Sides Commit to the Partnership

In the era of subscription selling, it's more important than ever for you to have happy and satisfied customers. Lighthouse accounts provide an inside view into what prospects and customers really need and what your organization is doing (and can do better) to deliver.

For your part, your company will need to provide direct access to your CEO as well as establish a dedicated support team. Best practices with lighthouse customers include

·      Monthly check-ins between executives

·      Quarterly in-person, on-site meetings at either the customer or company location

·      Bi-monthly meetings with clearly defined action items by team

·      Weekly internal email updates about lighthouse customer progress

Recognizing the importance of these key accounts, some startups showcase lighthouse customer logos on their walls. Others host lunch & learns about the customers' businesses, hearing from champions, investors, influencers, and even media presenters.

But the relationship can’t be one-sided.

Lighthouses have to commit, too, meaning they should allocate executive access and provide significant input to your roadmap, but without too many absolute demands. There’s also financial equitability. Lighthouse accounts should pay for what they use, with the exception of possible discounting in exchange for specific marketing activities, such as quotes in press releases or speaking engagements at industry events. Remember, our companies charge customers for our software and services because nothing should be free when you’re providing a valuable service or product.

Find Big Names that Can Be “Company Makers”

Lighthouse customers should be well-recognized brands. It may not be widely known, but forward-looking companies across industries -- think Starbucks and Target, VISA and Mastercard, JPMorgan Chase and PNC, for example -- want to work with you as much as you want to work with them. Global giants stay ahead of competitors by finding ways and new technologies that improve processes, increase customer engagement, drive revenue, and reduce costs. If you have something that can give them an edge, they’re interested.

Association with a few big brands puts a company on the map. Lighthouse accounts not only open doors, they offer tremendous opportunities for the kind of high-scale growth that can make a company wildly successful. Teaming with the right internal champion can turn an initial 50-seat sale into an enterprise-wide deal.

1:1 is the Ideal Executive Ratio

Too many and there's no way to support them. Too few and you don't have enough feedback to improve your product/service nor investor references to continue building. Lighthouse accounts should be the best example use cases of your software or service, making them the most strategic to your company. That’s why each lighthouse account must have a company executive sponsor, leading the relationship to greater success. The ideal ratio for lighthouse accounts is one executive from your company to each lighthouse customer organization. That basically means if you have five execs in your company including the CEO, you can handle five total lighthouse accounts.

Embrace Change

It doesn't have to be the end of either business if a lighthouse customer relationship dwindles. Change is constant. Some companies advance faster than others and timing is everything. Should the bright light of one customer begin to fade, be sure to replace it with another. This goes for both startups and global Fortune 100 companies. There should never be a time when employees don't know the name of your company's lighthouse customers.

Lighthouse accounts help companies of all sizes, across industries, safely navigate forward. They keep teams innovative and competitive. Who are your company's lighthouse customers? It's important for you and everyone else in your business to know.

About Kris Duggan

Kris Duggan is an entrepreneur, advisor, investor, and educator. He's advised and invested in a variety of Silicon Valley-based companies, including Palantir Technologies, RelateIQ (acquired by Salesforce.com), Addepar, Blend Labs, Turo, and Gusto. He co-founded and was the founding CEO of Badgeville and BetterWorks before co-founding a new technology company, based in Palo Alto, CA, this year. Kris is the Chief Sales Mentor at the Alchemist Accelerator. He previously served as an Adjunct Faculty for Singularity University, and is a frequent speaker on the topics of scaling startups, customer loyalty, gamification, employee engagement, and performance management.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1282723 2018-05-12T07:04:46Z 2018-05-31T20:18:42Z What’s HQ (Hustle Quotient) And Do You Have Enough Of It?

Hustle isn’t just the difference between good and great: for start-ups, it’s the difference between existence and non-existence, between “good enough” and “gone”. Companies in an industry will experience roughly the same degree of luck. Hustle is what makes the most out of good luck and sidesteps and perseveres through the worst luck. HQ, your Hustle Quotient, is how effectively you leverage your IQ and EQ. Hustle is a resource available to all, and this article explains 6 ways to increase your startup’s HQ. The article also explains the interaction of HQ with social, financial and human capital; and in what way HQ supports anti-fragile companies. Concepts are illustrated via examples from history and industry.

In my experience, one factor — a factor available to anyone — opens the door to success for startups: Hustle — the difference between existence and non-existence. Hustle has to be your guiding compass.

Your organization’s HQ, its Hustle Quotient, measures your perseverance and resourcefulness. HQ is how effectively you leverage your IQ and EQ.

It’s not new. Here’s a life-and-death example of HQ outside the realm of this century’s technology startups.  More than 100 years ago Amundsen and Scott led two separate expeditions in a race to be the first to reach the South Pole. Presumably, their goal was to also return from the expedition.  Amundsen reached the pole first, and he returned with every member of his expedition. Scott and his entire team perished and likely did not reach their goal. The difference in outcome — existence vs. non-existence — boils down to hustle.

Amundsen insisted on 20 miles a day, no matter the conditions, and he never went more that 20 even in great conditions. Scott rested on bad days and covered as much ground as possible on good days. Both teams had roughly the same conditions, but their outcomes were vastly different. Amundsen covered twice as much ground — returning from the expedition. Existence vs. non-existence.

Amundsen had broad contingency plans — literally. He carried three times the supplies that he calculated were needed, and he marked the caches with a 10km band of flags so he wouldn’t miss them. Scott carried the exact amount needed, and planted a single flag for each. Amundsen’s team was fed; Scott’s experienced starvation. Existence vs. non-existence.

Amundsen researched how the Inuit lived in order to understand the problems he would encounter. Scott knew how to use horses, so he used horses—which were not able to survive the conditions.

Three HQ lessons from these expeditions:

  1. Persevere through periods of bad conditions
  2. Contingency plans enable you to persevere
  3. Understand the problems before you choose your solution

A start-up adventure has striking similarities to the Antarctic expeditions, though not that fatal consequences of failure. There are many unknowns, but a bright north star: becoming a billion-dollar company. Startup companies have, on average, similar resources and luck. Hustle is what you make of the good luck, and how you persevere during the bad. Contingency planning gives you the backup you need to survive when the goal takes so much longer to reach than you expected, to endure during the bad luck, and as you navigate the unknowns. In a startup, you can’t dream in a vacuum — you have to address how to solve a real problem. Just as Amundsen created solutions correct for Antarctic conditions, startups must understand the market needs, headwinds, and pinpoints. Outcomes are also similar: existence or non-existence.

Here’s a Hustle example from the technology world: Imagine Larry Page steps on the elevator with you. You could be immediately star-struck and ask for an autograph, while expressing admiration for his accomplishments. Or you could engage him in a conversation that shows off your chops: “BTW I was at the GoogleNext conference last month, and it brought home to me that Google is really giving AWS a run for the money.” Larry is now compelled to say, politely, “Oh, thanks. So, what is it you do (that brought you to the conference)?” You use your HQ to deliver an answer gets his interest, and he agrees to connect with you. Now, although you don’t have an autograph, you do have potential to establish a relationship with Google. This IQ leveraged by hustle.

Anyone and any organization can have hustle. It is a renewable resource with no marginal cost.

So how do you get that hustle, or evaluate your HQ?

  1. Force yourself into uncomfortable situations, outside your comfort zone. Such as promoting your company even when it feels unbearably awkward.
  2. Work on things that truly move the company forward. For example, making 20 prospect calls. You’ll probably have to be uncomfortable — overcoming the feeling of failure that prospecting often brings, which is really overcoming yourself.
  3. Hire people with high HQ. Make HQ central to the interview. What have you done outside your comfort zone, or that’s risky, or leaps into the unknown. You must hire the hustle mindset and behavior, not the job skill set.
  4. Create a culture of tinkering. The route to success is faster if you try over and over, experimenting and learning until you find solutions.
  5. Create options where none exist. If you are prospecting, and get no response, what do you do? High HQ  people brainstorm on how to get a response. Who else could reach my prospect? How can I get near my prospect? How can I create more prospects?
  6. Do not accept binary outcomes. You reached your prospect and delivered your most persuasive arguments, yet you got turned down. Don’t react as if the outcome is Yes or No. You got a No to your offer, so now you ask  “What happened? Why not? What would have led to Yes? Who do you know who might want to use us?” Answers to any of those questions put you far ahead of where you were after No.   

High HQ teams make more of their startup capital. Startup capital is the combination of your social, human, and financial capitals. Financial capital is your buffer for hard times. Human capital is the skills and experience you collectively have. And social capital is your network in the industry you are in. Hustle makes you assess what you can do with your capital. How many people in cloud computing do you know, or how many people in your network know people in cloud computing? What are the gaps in your network? How will you fill those in? Our human world operates within clans or tribes. Hustle is identifying groups that are critical to your success, making sure you invest time and energy in becoming an integral part of them and using them effectively.

As you apply your elevated HQ to your organization, keep your scope broad. Company building is not product building. Product is only one of the variables to manage. The others include finance, advisors, investors, co-founders, talent customers, legal, HR, and partners. Some of these you can select based on their HQ. Some, like co-founders, advisors, and partners, will complement what you do, filling in for your organization’s gaps. It’s all about existence or non-existence.

This manifesto is a result of my constant research into what drives success.  I’ll share my reading list with anyone who reaches out to me.

About Asim Razzaq

Asim Razzaq is the co-founder and CEO of YotaScale. Prior to YotaScale, Asim was Senior Director of Engineering at PayPal and eBay. He built and ran the PayPal cloud infrastructure and his engineering teams made significant innovations in the area of manageability and system administration. He helped build the PayPal Developer Platform from zero to a billion dollars in payments volume. Asim was also responsible for all core infrastructure at PayPal processing 5 million transactions per day. He has lead engineering for multiple early and late stage startups in Silicon Valley and Austin with two of the companies exiting to Netsuite and Navitaire. 

Asim co-founded YotaScale to bring his expertise in large scale, mission-critical, cloud infrastructure management to companies beginning to use cloud services as well as those that are well on their way.

Asim holds a BS (Honors) degree in computer science from the University of Texas at Austin where he conducted research in distributed computing and large scale infrastructure sponsored by IBM Research. He is a published author in the field of computer science in the area of resource management for large scale, distributed systems.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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Alchemist Accelerator
tag:blog.alchemistaccelerator.com,2013:Post/1281660 2018-05-10T14:53:56Z 2018-05-10T16:00:03Z Demo Day Advice - From a VC Turned Entrepreneur

Entrepreneurs - congratulations on approaching Demo Day!  You'll soon be surrounded by interesting people, inundated by emails, and distracted by countless potential conversations that you'll need to prioritize carefully.  Based on several years of experience and more than a handful of “Demo Days”, including the Alchemist Accelerator’s, here are a couple of tips I hope you’ll find useful:

1)  Remember that 5 Minute Demo Day presentations are NOT enough time for listeners to decide whether to invest or not.  Your goal for the Demo Day presentations, therefore, is to attract the attention and trigger the NEXT CONVERSATIONS with the individuals in the audience that could be the best sources of feedback / investment ($) / advice / or customer introductions.

  • Sometimes all of these dimensions happen at once, usually feedback and "advice" happens first as a precursor to investment or introductions.
  • None of these dimensions, however, will happen if the listener (for whatever reason) decides they are not interested in having a follow-up conversation.
  • If you think someone or some firm could be a good fit for you, then be proactive in getting their attention.

2)  The demo day presentations are only 5 minutes, if not shorter!  The short format requires you to present in "broad brush strokes" that capture the most important highlights.  Prioritize what content to present and what details to highlight most efficiently.

  • Sometimes the slides you create for "full" 30/60 minute conversations with investors are good ones to reuse.  More frequently, it helps to edit and consolidate top-level takeaways or "aha moments".
  • Pay special attention to feedback from listeners who are hearing your pitches for the first time, domain experts who know your space, and non-experts who don’t know your space.  Each of them will give you different types of feedback, and you'll need to decide who to optimize for carefully.

3)  From my experience as a VC and angel investor, the most important questions to address within an abbreviated Demo Day pitch to trigger follow-ups from the right prospective investors are as follows:  
a.  Why now?

  • Compelling answers to this usually involve something significant changing in the market, with new/different customers or pain points that are growing, or new technology breakthroughs enabling problems to be solved, or something else encouraging different behaviors (such as government regulation or customer psychology).  
  • All of you are smart and talented.  Articulate (in simple terms to someone who is not an expert in your field) why you are excited and passionate enough to be dedicating your life to your companies right now.

b.  Why you?

  • The big opportunities and major inflection points across industries will be discovered by several, (usually many) different teams. What makes your insights unique or authentic?  
  • What experience or exposure do you have to the domain?  Have you or your co-founders been entrepreneurs before, or have you had other exceptional experiences in your life that will make you succeed when others give up?

c.  Target Market.

  • What subset of the market and subset of customers are you going to start targeting first, and how big can that "slice of the pie" get as you grow your product / team / business?  
  • Most VC's focus and talk about Billion dollar markets because its difficult to build large businesses in small markets, but it's rare that new products and new companies can target actual Billion dollar markets from the start.  Usually, whether limited by feature set, market awareness, or geography, most startups have to start by focusing on small pieces of big markets to grow into bigger markets and bigger companies.
  • I prefer to see a tighter focus and deeper understanding of smaller markets as precursors to bigger / quickly expanding markets rather than claims to HUGE markets that are crowded with competition or demonstrate lack of focus or deep understanding of target customers.

    d.  Product (or service). What are you building, creating, or enabling?

    • A single sentence that clearly articulates (again in simple terms that someone who is not an expert in your field can understand) is best.  That single sentence will keep evolving, and it will require more detail when you explain it to people with domain expertise. Even so, you should aim to distill the core trajectory of your company into to a single sentence that can be remembered.
    • What signs of customer validation, or market adoption, or business potential do you have?

    e.  Differentiation. What is defensible now and into the future?

    • What is the strategy for expanding, and what will become the more UNIQUE and compelling dimensions to your product offering vs. inevitable competition?
    • Are you 2x better or 10x better than the alternatives? Across what dimensions and subject to what assumptions?

    e.  Business Model.

    • At the seed stage you don’t need to have the world’s most comprehensive business model, nor a combination of 3 different business models.  You do, however, need to have some ideas on how you might start to capture the value or benefits that you provide.
    • Again, what signs of customer validation or business potential do you see? Deep understanding of how much customers are paying for alternatives, or inferior solutions, or notable competitors in the market are good proxies.

    Overall, strong Demo Day presentations usually weigh heavily towards addressing <Why now> + <Why you> + <Target Market>, with lighter treatments of <Product> + <Differentiation> + <Business Model> (due to time constraints).  Follow-up conversations, and deeper diligence from potential investors will go deeper into the areas of <Why you> + <Product> + <Differentiation> + <Business Model>.
    You can identify individuals/VCs who are a better "fit" for you on the basis of how well they already understand <Why now> + <Target Market>, and how deep they can dive into discussing the other areas. Individuals/VCs who don’t already share your opinions regarding the <Why now> and who don’t ask thoughtful questions about the other areas are usually dead ends, or will require a lot of time to be convinced.
    4) Have fun and stay positive!  Prioritize your time and scheduling of follow-up conversations!  The Demo Day pitches and many conversations that will follow are a unique and special time for you as entrepreneurs.  Build relationships, follow-up with the most relevant potential sources of advice or funding. Don’t let the many NOs and frequent radio silences you will encounter discourage you from progressing up the paths you are on.  You are privileged to see opportunities where others are blind, and courageous to climb routes that others are too scared to explore.

    Onwards!
    About Luis Robles

    Startup advisor & Angel Investor, Blockchain enthusiast, Experienced Company Builder & VC Investor (previously @ Sequoia Capital). Co-Founder, VP Products & Marketing at Diamanti. Knowledgeable about enterprise businesses, datacenter infrastructure, cloud computing, distributed + open source software, big data, IOT. Senior Product Manager and early engineer at VMware. BS and MS degrees in Computer Science from Stanford + an MBA from Harvard.
    About the Alchemist Accelerator
    Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1277219 2018-04-26T16:07:43Z 2018-05-04T20:17:22Z Customer Advisor Board: Early-Stage Hack to Getting Your First Customers

    As a founder and former CEO, I'm delighted to see so many Alchemist Accelerator portfolio startups executing highly engaged Advisor Councils (AdCos) when acquiring their first 10 paying customers. Yet most startups fall short of scaling their AdCos beyond a few influencers and MVPs. This is a critical mistake.  

    Active AdCos drive you to deliver more customer-focused products while creating momentum in the form of champions, stakeholders, thought leaders, communities, and loyal customers. Think of your AdCo as part of your startup's secret sauce, helping you scale quickly from Council (10-50 people) to Community (50-100 people) to User Conference (100+ people).

    As you embark on your customer development journey, an AdCo can serve as an enticing carrot to attract smart and talented individuals with the pain points you've outlined. Joining an AdCo comes with personal and professional perks—from new skills development to high-quality peer networking. Those joining AdCos recognize these benefits, but they'll become your first customers for two additional reasons: first, they really want the product you're working hard to deliver, and second, they want to help you succeed (and have funding to budget to do it).

    Qualifying early AdCo members is important. You want individuals that are

    • Thought leaders with deep experience and knowledge about the problem you are working to solve

    • Open and willing to co-build a solution with you

    • Able to access budget and have decision-making authority to buy

    Prioritize Your AdCo

    There are benefits across the business to establishing and scaling your AdCo:

    1. Product: Ongoing customer-focused product feedback

    2. Sales: Demand Gen (SQLs) of qualified leads and referrals

    3. Fundraising: Venture capital (VC) due diligence during your current or next round

    Product: Build WITH Customers Not FOR Customers

    AdCos instill a customer-first mindset while providing a critical product feedback loop. Product decisions and team scrum/sprints shift from sharing “I think” to “they said, they want, and they need” inputs.

    Data and insights from your AdCo need to be meticulously recorded and then shared “in their words.” At hiQ, we always found the devil was in the details. You should plan for your AdCo members to spend a full day alongside your engineers, data scientists, and product team members in structured round tables, breakout sessions, and panels.  

    Power tip: Host your AdCo meeting at a Council member’s location. Enterprise companies have conference rooms that can seat more than 20 people, and often, the organization will provide the drinks and snacks.

    Sales: Advisors Become Champions, Then Customers

    Your AdCo is one of the tools in your demand-gen and pre-product sales arsenals, and a measurable outcome of establishing one. AdCo members need to be in your sales pipeline as they move from Advisor to Champion to Customer to Reference and Referral. You'll be able to quickly qualify which Advisors will become champions and customers. They're the ones that will write the internal business use case for budget approval because they can’t live without the product(s) you are building. They'll be the ones standing on stage next to you when you officially launch.

    Power tip: Use a pending AdCo meeting to close a late-stage deal. Prospects enjoy talking with customers before they sign, so have them sit next to each other.

    Fundraising: The Best 2 Hours VCs Spend on Due Diligence

    AdCos will scale with your customer growth, and VCs will notice. VCs think in terms of product market fit. This is validated when they walk into a packed ballroom full of clients, prospects, analysts, and job applicants—all wanting to be part of what you're building. There's no better and bigger moment for you and your employees then having customers on a main-stage talking about your product and how it saves them millions of dollars.

    Power tip: Invite VCs to Council meetings as soon as possible. Their calendars book up a few weeks out.   

    About Darren Grant Kaplan

    Darren Kaplan is the co-founder and founding CEO of hiQ Labs (www.hiqlabs.com), a data science company, informed by public data sources, applied to human capital to make work better. Mr. Kaplan is an Alchemist Accelerator mentor, working with Augmented Reality, Cyber Security, and HR enterprise SaaS startups.

    About the Alchemist Accelerator

    Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1274419 2018-04-19T15:24:45Z 2018-04-19T16:00:04Z The Key to More Sales: Focus on Your State

    It's not the product. It's not the timing. It's your body language and tonality. Both have more to do with sales success than other factors because at the core, sales is result-driven communication.

    I've been leading sales organizations for more than a decade. However, when I speak with entrepreneurs as an Alchemist Accelerator mentor, I’m reminded that although not everyone is employed in sales, at different times, we all sell—to potential investors, co-founders, employees, partners, and perhaps, even family members.

    Your State Matters

    Take a minute. Consider how you feel right now. You should care about your state of mind because it’s influencing the work that you're doing and the effectiveness of your communication (i.e., your body language and your tonality). You need to ensure your mood is making a positive impact, helping you achieve what technical professionals call flow or being in the zone. This is your peak state, and it affects the results that you want. It heightens your performance. The opposite is also true. If you are in a bad state, your performance dips, you communicate poorly, and you make mistakes.

    A few months ago, I went to a demo-day event where a number of founders were pitching their products to a large audience. After noticing a disturbing trend in a few sessions, I did a little experiment. What I observed was this: at the start of every presentation, attendees sat up, ready to listen. But by the two-minute mark, most attendees lost interest and were looking at their laptops or phone screens. The presenters were dull. Some lacked energy, others lacked enthusiasm, as they pitched their products.

    One presenter was different. He started with high energy. He sounded passionate and engaging. Attendees looked up from their screens and listened. He asked questions, and they paid attention. Yet within a few minutes, his energy dipped and he lost them. The attendees went back to their devices because he couldn't maintain his state.

    I spoke next, determined to engage the audience’s attention through the entire session. My product wasn't any better than the others being presented, so I knew my communication needed to be different. I took a moment to get myself into a peak state. Then I made my pitch with a powerful and palpable energy. I was loud and enthusiastic. I moved around the stage, and asked a ton of questions. Above all, I maintained intensity during my entire talk, and I paid careful attention to the results.

    Throughout my session, the vast majority of the audience was attentive and engaged. I had five times the number of questions about my product than any presentation before me, and at the end, a number of attendees came by to meet me in person. My pitch was successful, and it had very little to do with the product I was introducing.

    The secret to a successful sales pitch is more than the initial spark—it's sustained energy and enthusiasm. If you can achieve peak state, getting into the zone, you communicate better. Your body language and tonality automatically attracts people and significantly enhances your influence over them. If you can consistently attain this state, you can consistently elevate your performance above the norm.

    Two Simple Ways to Master Your State

    There are two simple steps you can take to very quickly make a meaningful difference in the result of any communication:

    1.     Hack your brain

    2.     Hack your body

    What is hacking your brain? In effect, it's an exercise to change your state. You hack your brain before a big pitch by taking five minutes and focusing your thoughts on these things: (Hint: It helps to write them down.)

    • Think of one thing you are truly excited about today. If it's a thing, imagine receiving it right now or if it's an event, imagine it taking place right now. Focus on how you feel.

    • Think of one thing you are truly thankful for in your life? Take a moment to appreciate that feeling.

    • Think of one person you are thankful to have in your life? Take a moment to consider why.

    When you hack your brain, you put it in a different mood. You replace negative emotions with positive ones—excitement, thankfulness, and appreciation—and those excrete the chemicals that get you closer to your powerful peak state.

    Hacking your brain isn’t enough. You need to hack your body in a similar way because emotions and your body are connected in a profound way. If you change the state of your body, you change the state of your mind and vice versa. As Tony Robbins often says, “motion creates emotion!” Doing any form of exercise (e.g., fast-paced walking, running, dancing, or even some jumping jacks) can influence your mental state and put you in the zone. With the right mental state, you'll start to notice that your communication and body language improves. You do better things and you do things better. Sales is one of those things.

    After hacking your brain and your body, you feel better. Your body language automatically improves, and your tonality matches your positive, confident, and empowered emotions. At this moment, you have the best chance to influence others through your communication.

    Achieve Results

    Your body language and tonality are what people use to interpret what you are saying. It’s not what you say, it’s how you say it that matters. Frame of mind and tonality are the reasons two sales people using the exact same script, answering the same questions, can have very different results.

    The next time you're ready to make a cold call, close a deal, pitch to investors, or present in front of an audience, pay attention to your state. If you’re not in a peak state, take a minute to hack your brain, then hack your body. You'll be glad you did.

    About Kevin Ramani

    Kevin is the Head of Sales at Cobalt Robotics, and was one of the founding team members of Close.io, helping to build the company from the ground up. Kevin is also a startup advisor and a mentor to several Silicon Valley startups. Connect with him online.

    About the Alchemist Accelerator

    Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

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    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1269490 2018-04-12T16:00:00Z 2018-04-13T05:50:38Z Funding Basics: Fundraising 101

    If you’re unfamiliar with how venture capital funding works, it can seem akin to playing the lottery. Anyone can try, but only a few lucky entrepreneurs actually win. Fortunately, fundraising isn’t as random as a Powerball drawing and founders can improve their odds of success by engaging with right-size partners, recognizing what investors find intriguing, and understanding the technical aspects of term sheets.

    How do I know?

    I was a VC.

    Establish a Strategy

    As an Associate at Draper Fisher Jurvetson and now as Founder of the Alchemist Accelerator, I’ve met hundreds of people with good ideas and great demos, but far fewer with a strategic plan for fundraising. Founding teams can save time (and alleviate stress) by researching fund sizes and prioritizing meetings based on the outcome they expect. Founders and the venture capitalists they choose will need to make the economics work. Investors will need to pay back their funds. A rule of thumb is that one out of every 10 investments in a VC portfolio will drive outsized returns. And a typical fund has 30 investments. So 3 companies in a given VC fund portfolio will likely be responsible for the fund’s performance. Given this, most investors want to see a path to paying back at least ⅓ of their fund size with an individual investment.

    Investors are also constrained by the number of investments they can make. Because they have to limit the number of board seats they take on, they often can only make 2 or 3 new investments per year. And each investment has to deploy enough capital for them to deploy the cash in the fund. For these reasons, investors at large funds (e.g. funds that are $300m or larger in size) will care much more about whether they have enough ownership in your company to create an exit to pay back their fund than the check size of your investment. In fact, if you are asking for too little money (e.g. less than $3m) it can be more difficult for that investor to justify the investment given the size of their fund and the limited number of new investments they can make each year.

    Ideally, founders approach a mix of VCs during the fundraising process, recognizing that there will be more traction with those that are a good fit. Don’t get too excited about meetings because every firm will want to meet for fear of missing the next big thing—think Google! That’s why it’s important for startup teams to have a plan.

    Choose to make scarcity of supply an asset. Optimize for a short, yet intense fundraising process. Establish a list of three dozen firms, then agree to pursue 12 active discussions at a time—segmenting top-tier / second-tier VC firms, angels / high-value investors, and corporates / strategic investors into separate thirds. This will enable the rapid replacement of non-responsive firms, and help ensure the arrival of term sheets at the same time.  

    Share Your Story

    VCs meet (and subsequently) invest in startups for a variety of reasons. The startup meets all of the criteria of previously proven successful companies in their portfolio; the startup is somehow connected to the VCs personal network that she trusts; or the firm likes to make contrarian bets. Whatever the reason, the dance between startup and VC always begins with a presentation.

    During a seed or series A round, fundraising meetings focus on the idea and its potential. In series C and later rounds, VCs spend time evaluating the idea, the market, and results. How has the company executed to date?

    Early round fundraising presentations are expected to be lean, including a brief overview of the team and the market potential. A dozen or fewer core slides is ideal, coupled with a large appendix of slides that goes deeper into specifics. An overview of capabilities and a product demo will also be expected. Sequoia Capital has a good template for creating solid fundraising presentations.

    But wait... Before presenting, stop, summarize how and why you are there (don’t forget to mention explicit connections). The goal of this is to try to address from the top the two fundamental questions wrestles with: “Are you any good?” and “If you are so good, why are you talking to me?”. At the beginning -- from the top -- you want to signal strength (that you are in fact a company the investor should want to chase), and that you are talking to them because of some privileged access that investor has. For example, “Before I begin, let me just set some context. As you may know, we have been heads down with customers and will be beginning our official raise next quarter. Our attorney XXX spoke very highly of you and recommended we get your guidance in advance of that”.

    You then want to unearth any biases upfront the investor may have before you go into your pitch. VCs often provide the best feedback before you speak. This time is also the best chance you have of understanding any bias or concerns VCs may have about differentiation, distribution, market factors, or some other issue you’re going to cover.

    You can simply ask “Did you have a chance to review the information I sent over?” They may not have, but if they have, you can invite them to share what’s important to them upfront so you can cater your talk better to them.

    At the end of the day, VCs want founders to like them and VCs want to like the founding team’s energy and passion. After all, funding is a long-term commitment (typically 3—7 years). Additionally, potential investors want to be sure the market opportunity is large enough and that a startup’s entry point is specific enough to ensure a big return.

    About Ravi Belani

    Ravi Belani is Fenwick & West Lecturer of Entrepreneurship at Stanford University, and Managing Director of the Alchemist Accelerator. Ravi formerly spent six years as part of the investment team at Draper Fisher Jurvetson's Menlo Park global headquarters, where he led investments and served on the boards as the first institutional investor in companies such as Justin.TV & Twitch (acquired by Amazon for $970m), Pubmatic, Vizu (acq’d by Nielsen), and Yield Software (acq'd by Autonomy). Ravi formerly worked in product management at two Kleiner Perkins enterprise startups, and as a consultant in McKinsey and Company's San Francisco office. Ravi is a Phi Beta Kappa and Tau Beta Pi graduate of Stanford University, holding a BS with Distinction and MS in Industrial Engineering. Ravi also holds an MBA from Harvard Business School.

    About the Alchemist Accelerator

    Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley -- including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

    This blog is the third in a financing series with topics designed to help entrepreneurs be better prepared for venture capital conversations.

    ]]>
    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1266000 2018-04-05T14:20:25Z 2018-04-05T16:00:07Z How One Hour of Customer Development Saves Five Hours of Coding

    The greatest expert on your customer is: your customer.  I consider that rule number one on any customer development journey.

    Over the years, I’ve discovered one of the biggest mistakes tech entrepreneurs make is overbuilding. Teams get so excited about an idea that they create feature after feature, hoping one of them will help someone, somewhere, soon save time, spend less, or be entertained.  

     

    Getting to Data-Driven

    The reason I wrote Lean Customer Development to stop teams from building things that people don’t want. That’s what successful customer development does for you - allows you to avoid (some) mistakes and focus on building what your customers will use, love, and buy.  You see, no matter how smart people are, no matter how well they know their industry, they’re wrong at least half of the time. That means about 50 percent of what is built is wasted effort!

    In my experience, every hour spent on customer development saves an organization five hours of design and coding time. That’s my conservative estimate. It’s probably closer to 20 hours.

    One of the reasons teams overbuild is because humans like to do what comes naturally. We like to build! We love coming up with solutions (that’s why we join product teams and start companies). But if you’re just starting out, you have to embrace what comes a little less naturally—and that’s listening.

    Following a Proven Process

    Start with a hypothesis. Ask the right questions. Make sense of the answers. Then figure out what to build based on the input. Those are steps to successful customer development, yet not everyone follows them.

    Teams often lead with their own product - a solution created based on assumptions of who’ll need it and why. We don’t create a narrow, unbiased hypothesis that focuses on the person, the problem, and how we can make their life better. This is ineffective for a couple of reasons.

    First, it puts you in the role of the expert when you really need to be learning from your prospective customer. Second, once you show someone a solution, that’s what they’ll talk about. Rarely does the person you’re talking with stop and say, “wait, I don’t really have that problem” or “hold on, I’m not motivated to change my behavior over this”.  When you start with a solution, you risk hearing a lot of “polite maybes” instead of uncovering the “here’s what I really need” answers that lead you to a successful business.

    Getting Input

    As an Alchemist Mentor, I encourage founders to start with one testable hypothesis.  For example, “I believe [type of person] has [problem they need to solve] in order to [experience this benefit]”. There are three segments to that hypothesis, and each of them can be invalidated - you might be talking to the wrong type of person; they may not have the problem you expect; they may not see that a solution will make their life better.

    There may be multiple stakeholders - for example, if you are trying to develop a solution to improve patient compliance in taking their medicine, you’ll likely need to talk to the doctors who prescribe medication as well as the people swallowing the pills. By understanding the behaviors, motivations, and constraints of all your stakeholders, you’ll be better able to design a solution that they’ll actually use and benefit from.

    Abstract up a level: more general, “storytelling” questions about the ways people do their jobs, what they buy, and how they use products give you more informative answers than yes/no questions. For example: What frustrates you about your job? How is work done in your organization? How do you evaluate solutions? Open-ended questions like these give customers the power to talk about what matters most to them. At the end of the discussion, don’t forget to inquire about what else you should have asked.

    I prefer one-on-one conversations: in-person is great, because you can see the customer’s environment - but phone conversations are often far easier to schedule and conduct. The best customer development method is the only you’ll actually do!

    I’m not a fan of focus groups. It seems far more efficient to talk to multiple people at once, but participants may not openly share in a group for fear of sounding dumb or having an idea dismissed.

    Depending on your hypothesis, you may easily find people in your extended network or a community online. (When people ask, ‘but how will I find people before I have a product to show them?’, I ask ‘but how were you planning on finding people after you have a product?’)  Sometimes you’ll need to pay for access to the right people through services such as LinkedIn InMail or user research firms, but generally you’re better off investing the time to figure out where your prospective customers ‘live’, online or offline, and making yourself part of those spaces.  You’ll need to build that trust eventually, so you may as well start in the early phases of your company!

    Making Decisions

    No matter how you discover customers, approach each conversation as a listener, not an expert.  I often recommend telling people explicitly, “I want to hear from you - I’m going to try and talk as little as possible.”  That’s the valuable data you need to inform your decisions. Whether you’re building your first product or rolling out a new feature, test everything. Customer discovery that’s about them, not you, is how to ensure your startup builds something people actually want to use and will pay money to buy.

    About Cindy Alvarez

    Cindy Alvarez is the author of Lean Customer Development: Building Products Your Customers Will Buy and Director of User Experience for Yammer (a Microsoft company). She has over a dozen years’ experience leading design, product management, user research, and customer development for startups, and is currently using that background to drive intrapreneurial change within Microsoft. She tweets as @cindyalvarez.

    About the Alchemist Accelerator

    Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley -- including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

    ]]>
    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1265986 2018-03-29T14:54:34Z 2018-03-29T16:00:04Z Do Pivots Matter?                                                               There’s a sign on the wall but she wants to be sure
                                                               Cause you know sometimes words have two meanings
                                                                               Led Zeppelin – Stairway to Heaven

    In late 2013 Cowboy Ventures did an analysis of U.S.-based tech companies started in the last 10 years, now valued at $1 billion. They found 39 of these companies.  They called them the “Unicorn Club.”

    The article summarized 10 key learnings from the Unicorn club. Surprisingly one of the “learnings” said that, “…the “big pivot” after starting with a different initial product is an outlier. Nearly 90 percent of companies are working on their original product vision. The four “pivots” after a different initial product were all in consumer companies (Groupon, Instagram, Pinterest and Fab).”

    One of my students sent me the article and asked, “What does this mean?”  Good question.

    Since the Pivot is one of the core concepts of the Lean Startup I was puzzled. Could I be wrong? Is it possible Pivots really don’t matter if you want to be a Unicorn?

    Short answer – almost all the Unicorns pivoted. The authors of the article didn’t understand what a Pivot was.

    What’s a pivot?
    A pivot is a fundamental insight of the Lean Startup. It says on day one, all you have in your new venture is a series of untested hypothesis. Therefore you need to get outside of your building and rapidly test all your assumptions. The odds are that one or more of your hypotheses will be wrong. When you discover your error, rather than firing executives and/or creating a crisis, you simply change the hypotheses.

    What was lacking in the article was a clear definition of a Pivot.  A Pivot is not just changing the product. A pivot can change any of nine different things in your business model. A pivot may mean you changed your customer segment, your channel, revenue model/pricing, resources, activities, costs, partners, customer acquisition – lots of other things than just the product.

    Definition: “A pivot is a substantive change to one or more of the 9 business model canvas components.”

    Business Model
    Ok, but what is a business model?

    Think of a business model as a drawing that shows all the flows between the different parts of your company’s strategy. Unlike an organization chart, which is a diagram of how  job positions and  functions of a company are related, a business model diagrams how a company makes money – without having to go into the complex details of all its strategy, processes, units, rules, hierarchies, workflows, and systems.

    Alexander Osterwalder’s  Business Model canvas puts all the complicated strategies of your business in one simple diagram. Each of the 9 boxes in the canvas specifies details of your company’s strategy.  (The Business Model Canvas is one of the three components of the Lean Startup. See the HBR article here.)

    So to answer my students question, I pointed out that the author of the article had too narrow a definition of what a pivot meant. If you went back and analyzed how many Unicorns pivoted on any of the 9 business model components you’d likely find that the majority did so.

    Take a look at the Unicorn club and think about the changes in customer segments, revenue, pricing, channels, all those companies have made since they began: Facebook, LinkedIn – new customer segments, Meraki – new revenue models, new customer segments, Yelp – product pivot, etc. – then you’ll understand the power of the Pivot.

    Lessons Learned

    • A Pivot is not just when you change the product
    • A pivot is a substantive change to one or more of the 9 business model canvascomponents
    • Almost all startups pivot on some part of their business model after founding
    • Startups focused on just product Pivots will limited their strategic choices – it’s like bringing a knife to a gunfight

    About Steve Blank

    Entrepreneur-turned-educator Steve Blank is credited with launching the Lean Startup movement. He’s changed how startups are built; how entrepreneurship is taught; how science is commercialized, and how companies and the government innovate. Steve is the author of The Four Steps to the Epiphany, The Startup Owner’s Manual -- and his May 2013 Harvard Business Review cover story defined the Lean Startup movement.  He teaches at Stanford, Columbia, Berkeley and NYU; and created the National Science Foundation Innovation Corps -- now the standard for science commercialization in the U.S. His Hacking for Defense class at Stanford is revolutionizing how the U.S. defense and intelligence community can deploy innovation with speed and urgency, and its sister class, Hacking for Diplomacy, is doing the same for foreign affairs challenges managed by the U.S. State Department. Steve blogs at www.steveblank.com.

    ]]>
    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1258354 2018-03-08T17:00:00Z 2018-03-24T01:23:14Z Strategy is Not a To Do List

    I had breakfast with two of my ex-students from Singapore who were building a really interesting startup. They were deep into Customer Discovery and presented a ton of customer data on the validity of their initial hypothesis – target customers, pricing, stickiness, etc. I was unprepared for what they said next. “We’re going to do a big launch of our product in three weeks.” I almost dropped my coffee. “Wait a minute, what about the rest of Customer Development? Aren’t you going to validate your hypotheses by first getting some customers?”

    Without any sense of irony they said, “Oh, our investors convinced us to skip that part, because our customer feedback was all over the map and our schedule showed us launching in three weeks and they were worried that we’d run out of cash. They told us to stay on schedule.” Now I was confused, and I asked, “Well what do you guys believe – Customer Development or launch on a schedule?” Without missing a beat they said, “Oh, we believe both are right.”

    I realized I was listening to them treat Customer Development as an item on their To Do list.

    Suddenly, I had a massive case of déjà vu.

    Can You Pull This Off
    I was VP of marketing at Ardent, a supercomputer company where a year earlier I had a painful and permanent lesson about Customer Discovery. I was smart, aggressive, young and a very tactical marketer who really hadn’t a clue about what strategy actually meant.

    One day the CEO called me into his office and asked, “Steve I’ve been thinking about this as our strategy going forward. What do you think?” And he proceeded to lay out a fairly complex and innovative sales and marketing strategy for our next 18 months. “Yeah, that sounds great,” I said. He nodded and then offered up, “Well what do you think of this other strategy?” I listened intently as he spun an equally complex alternative strategy. “Can you pull both of these off?” he asked looking right at me. By the angelic look on his face I should have known that I was being set up. I replied naively, “Sure, I’ll get right on it.”

    Ambushed
    25 years later I still remember what happened next. All of sudden the air temperature in the room dropped by about 40 degrees. Out of nowhere the CEO started screaming at me, “You stupid x?!x. These strategies are mutually exclusive. Executing both of them would put us out of business. You don’t have a clue about what the purpose of marketing is because all you are doing is executing a series of tasks like they’re like a big To Do list. Without understanding why you’re doing them, you’re dangerous as the VP of Marketing, in fact you’re just a glorified head of marketing communications.”

    I left in daze angry and confused. There was no doubt my boss was a jerk, but unlike the other time I got my butt kicked, I didn’t immediately understand the point. I was a great marketer. I was getting feedback from customers, and I’d pass on every list of what customers wanted to engineering and tell them that’s the features our customers needed. I could implement any marketing plan sales handed to me regardless of how complex. In fact I was implementing three different ones. Oh…hmm… perhaps I was missing something.

    I was doing a lot of marketing “things” but why was I doing them? I had approached my activities as simply as a task-list to get through. With my tail between my legs I was left to ponder; what was the function of marketing in a startup?

    Strategy is Not a To Do List, It Drives a To Do List
    It took me awhile, but I began to realize that the strategic part of my job was two-fold. First, (in today’s jargon) we were still searching for a scalable and repeatable business model. My job was to test our hypotheses about who were potential customers, what problems they had and what their needs were. Second, when we found these customers, marketing’s job was to put together the tactical marketing programs (ads, pr, tradeshows, white papers, data sheets) to drive end user demand into our direct sales channel and to educate our channel about how to sell our product.

    Once I understood the strategy, the To Do list became clear. It allowed me to prioritize what I did, when I did it and instantly understand what would be mutually exclusive.

    Good Luck and Thanks For the Fish
    My students were going through the motions of Customer Development rather than understanding the purpose behind it. It was trendy, they had read my book and to them it was just another step on the list of things they had to do. They had no deep understanding of why they were doing it. So they were at a crossroads. Since their investors had asked them to launch now, what happened if their initial assumptions were wrong?

    As they left I hoped they would be really lucky.

    Lessons Learned

    • Entrepreneurs get lots of great advice.
    • Most of it is mutually exclusive.
    • Don’t do it if you can’t explain why you’re doing it.
    • Or else it all becomes a To Do list.

    About Steve Blank

    Entrepreneur-turned-educator Steve Blank is credited with launching the Lean Startup movement. He’s changed how startups are built; how entrepreneurship is taught; how science is commercialized, and how companies and the government innovate. Steve is the author of The Four Steps to the Epiphany, The Startup Owner’s Manual -- and his May 2013 Harvard Business Review cover story defined the Lean Startup movement.  He teaches at Stanford, Columbia, Berkeley and NYU; and created the National Science Foundation Innovation Corps -- now the standard for science commercialization in the U.S. His Hacking for Defense class at Stanford is revolutionizing how the U.S. defense and intelligence community can deploy innovation with speed and urgency, and its sister class, Hacking for Diplomacy, is doing the same for foreign affairs challenges managed by the U.S. State Department. Steve blogs at www.steveblank.com.

    ]]>
    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1254535 2018-03-01T15:00:02Z 2018-03-01T17:00:04Z Funding Basics: Customer Development

    Entrepreneurs take note. More startups fail from a lack of customers than from a failure of product development. That’s why I believe strongly that every new product company should have a methodology for developing customers.

    I’m a proponent of Steve Blank’s startup stack methodology for customer development, which features the following steps:

    • Customer Discovery – Begin with a business model canvas, a summary of how you’re going to serve customers and earn money

    • Customer Validation – Make assumptions, then test them to develop a repeatable and scalable sales process

    • Execution –  Fine tune your model to get to a market fit that is tight and profitable; pivot, as needed

    As an Alchemist Accelerator mentor, I recently had an opportunity to share some perspective about the customer development process and how to maximize success. The first thing I told the group in front of me—a large percentage of whom were engineers—was that they should focus everything on finding the right customer segment, rather than building or modifying a new product concept to fit initial discussions. I think I heard a collective sigh of relief before I began my presentation.

    Completing Your Canvas

    Research has proven effective customer discovery begins with a business model canvas, so the first part of our discussion, framed in that context was designed for them to hear one thing: You are making a best-guess at first. There will be plenty of time for refinement, when you know more.

    A strategic management and lean startup template, your canvas should reflect initial assumptions. To begin, you must understand the market you’re targeting—total addressable, served available, and/or target market. You’ll also need to define the type of market you’re hoping to penetrate. Is it existing with incumbents, but a known problem; new with no competition, but steep education requirements; re-segmented where you’re offering a lower cost or niche alternative; or are you cloning a concept from somewhere else?

    Your canvas should also identify key value propositions. What is the job your customers are hiring you to do? How will you do it, and most important, what one-to-three benefits will customers get from using your product or service?

    In the customer relationships section of your canvas, you’ll need to outline how you plan to

    • Get customers

    • Keep customers

    • Grow customers

    In addition, your canvas should highlight any other key activities, resources (e.g. required equipment), partners and costs (fixed and variable), as well as your anticipated revenue model (e.g., one-time scale, subscription, etc.).

    Finding Your Fit

    A completed business model canvas ensures your team has fully immersed itself in the customer problem. As such, it can serve as a foundation as you define tests for customer validation.

    Testing can begin once you’ve identified subjects. Who are they—end users, influencers, recommenders, decision makers, or others? What do they do all day, and can you create an organizational or influencer map around them? Plus, don’t forget to acknowledge any saboteurs because they have no interest in your success.   

    Next, only founders should conduct customer validation meetings, and they should be face-to-face for added visual cues. Don’t outsource the job. Ask open-ended questions and avoid trying to convince someone he or she needs your solution. Test your theories to determine if you’re on the right track. If you don’t get a good signal, reframe the problem. Test again.

    In general, ask questions that help you learn more. Lead with

    • Tell me more about…

    • What do you mean by…

    • How so…

    • Why is that…

    • What are your thoughts on…

    • How would you quantify…

    • How did you measure…

    • How did you come up with that…

    • What was your thinking behind…

    The goal of every customer validation meeting should be the same: To understand the problem space and the current solutions available.

    Pivoting and Execution

    During customer validation, your team may uncover some startling truths. Your product doesn’t fit the market it was intended to serve. Prospects already have a solution for x, but have you considered this other opportunity, y? Do not panic.

    Instead, apply your development methodology to your customer discovery process. Be agile. Don’t build a new product. Find a new set of customers. Pivot into a new space and test again.

    By following a customer development process, you have a tremendous opportunity to deliver what people will pay for, improving your product along the way. Moreover, you’ll have high-quality data to answer the question “who is your customer?” when potential investors ask.

    About Alan Chiu

    Alan Chiu is a Partner at XSeed Capital, with a strong background in enterprise software startups. His investment areas include mobile enterprise applications, data analytics platforms, enterprise infrastructure, and fintech startups. He serves on the Board of Directors of Breakaway and previously served on the board of StackStorm (acquired by Brocade – NASDAQ:BRCD). He has provided support to other portfolio companies including Lex Machina (acquired by LexisNexis of the RELX Group – NYSE:RELX), AtScale, Dispatcher, Teapot (acquired by Stripe), Pixlee, SIPX (acquired by ProQuest), Zooz, BrainofT, Mines.io, Inklo, and My90. Alan is currently Co-President for Stanford Angels & Entrepreneurs, an alumni association that seeks to strengthen Stanford’s startup community by fostering relationships among entrepreneurs and alumni investors.

    About the Alchemist Accelerator

    Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley -- including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

    This blog is the second in a financing series with topics designed to help entrepreneurs be better prepared for venture capital conversations.

    ]]>
    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1251039 2018-02-22T16:00:03Z 2018-02-22T17:00:03Z Funding Basics: Adopting the Best Business Model

    The culture of nearly every business-to-business software startup centers on products. Everyone talks about product innovation and disruptive technology, but I think today’s founders need more than great product ideas to launch successful companies.

    In my role as Managing Director of Hummer Winblad and also as an Alchemist Accelerator mentor, I share this advice with new entrepreneurs: Get as comfortable with your spreadsheets as you are with your product. By that I mean that your financial models show potential investors you’ll be a metrics-driven organization and that you understand you are building a business not just a product. I also believe that only metrics-driven companies can operate high-velocity business models.

    A New, Emerging Approach

    If success is 10 percent idea and 90 percent execution, deep thinking is required of teams pulling together new business models. For example, are you going to sell direct or through a channel?  Will you have a subscription or a perpetual model? Do you envision a “land and expand” model where you encourage a smaller, initial buy that increases over time? Does your business model reflect the way customers want to buy?

    Teams developing enterprise software traditionally have had to factor in a 9-to-12-month sales cycle on top of the year or more it takes to deliver product. Both development and expensive sales professionals operating in this model require significant runway—and thus funding.

    Fortunately, times are changing.

    Taking a cue from evolving consumer models, I now encourage enterprise software founders to more precisely consider cost of sales (including customer acquisition costs relative to pricing and hiring) together with product decisions.

    Our team members and other venture firms ask them to think about how they can achieve operational and growth targets from two perspectives:

    • The old model – Costly, large account-focused, in-person sales teams operating on a quarterly rhythm

    • The new model – High-velocity, mid-market-focused, inside sales teams operating on a weekly rhythm

    The new, high-velocity model optimizes sales and marketing processes by measuring the end-to-end effectiveness of all touchpoints. With metrics, teams can determine what is and what isn’t delivering results. I created two blog posts a few years ago explaining the high-velocity business model and the metrics for a high-velocity business model—based on the success of teams that Hummer Winblad invested in early.

    High-Velocity Benefits

    For a startup pricing products in the USD$150,000 and up range, leveraging the traditional, enterprise sales model may still be practical and even preferred. For everyone else, here’s why a high-velocity model makes more sense:

    • Faster time to revenue – The combination of an assertive inside sales professional (who can reach 80 to 100 prospects a day) and a web purchasing model speeds sales, which enables the company to run on monthly recurring revenue.

    • Greater accountability – When your product team’s responsibilities expand beyond building the solution to the entire lifecycle (from first customer touch to download to using), teams are more collaborative and can achieve greater success faster.

    • Complete visibility – Companies operating high-velocity models are highly automated and instrumented, so individuals and teams are always aware of their goals and progress toward reaching them—from calls and demos to trials, seats, and monthly volumes.

    Does Your Business Have the DNA?

    In a high-velocity business model, leadership, product, sales and marketing teams all shoulder responsibility for success. We see entrepreneurs embracing this new approach taking a similar journey, learning from others that have succeeded already about how to ramp up fast.

    My tips for them include the following:

    1. Hire consumer experts to run your enterprise marketing model, so it’s firing on all cylinders

    2. Simplify the sales process by adding a free or low-cost download feature

    3. Add insides sales professionals to follow up on every lead and upsell from the download

    4. Run everyone in the company through your sales process—from start to finish—to ensure everyone understands it

    5. Test online pricing and trial models by dividing traffic

    6. Test your social media and web flows, counting the number of clicks at each step

    7. If you choose to work with channels, hire someone that has previously built them

    8. Bet on mid-market customers to start, but establish a sales value that when exceeded, makes sense to add enterprise sales

    For founding teams seeking funding, business models matter. Remember your ability to explain the thinking behind your business model is as important as explaining the product you’re going to bring to market—and sometimes, more important.

    About Me

    As Managing Director at Hummer Winblad, I oversee investments in SaaS, virtualization, cloud and mobile technologies. Prior to joining Hummer Winblad Venture Partners in 2006, I was involved in founding and operational roles at start-up companies. I was a co-founder of AutoFarm (now Novariant), a company focused on GPS and robotics. Although I spend less time programming now, I started my technical career coding and hacking computer games. I have a Master of Science (Engineering) degree from Stanford University, an M.B.A. from the Stanford Graduate School of Business, and an Engineering Physics degree from Queen’s University.

    About the Alchemist Accelerator

    Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley -- including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

    This blog is the first in a financing series with topics designed to help entrepreneurs be better prepared for venture capital conversations.

    ]]>
    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1230702 2018-02-01T16:11:14Z 2018-02-01T17:00:05Z Not BI, AI

    A product business can double its revenue and quadruple its margins by moving to a service business. What is service? It's information, personal and relevant to you.  

    Amazon delivers information that is personal and relevant to you, for example, with its recommendations: customers like you bought this book, or customers like you like this music. Now think about your favorite banking site and log in. I will contend that there’s very little personal and relevant information. The only reason you’re being asked to log in is for security reasons. After that you are really looking at a big shopping cart to move money from savings to checking, buy stocks, sell a bond, etc. 

    Could the bank deliver information that’s personal or relevant to you? Could they say that people like you bought this stock, or people like you re-financed their mortgage? Yes, they could, so why don’t they? Well, you probably never thought about this, but the consumer Internet that Google and Bing let you see through search is believed to only be about 100 or 200 terabytes. That’s it. Now, I’ll guarantee your current IT systems have 10, 100, or 1,000 times that amount of information; so why can’t they deliver information that is personal and relevant to you? Well, I say they are held hostage by the SQL monster. So let’s just have a little fun here.

    It’s the late ‘90s and I have several SQL engineers in the room. I come in with a brilliant business idea. My idea is that we are going to index the consumer Internet and we’re going to monetize it with ads. We’re going to be billionaires! Just guess what the SQL engineers would do?

    The first thing they’re going to do is design a master, global-data schema to index all information on the planet. The second thing they’re going to do is write ETL and data cleansing tools to import all that information into this master, global-data schema. And the last thing they are going to do is write reports, for instance, the best place to camp in France or great places to eat in San Francisco.

    Any of you who are technical are probably laughing right now thinking, “Well that’s a completely stupid thing to do.” But if you try and attack the problem using SQL and BI tools, you’re also going to fail.  

    Furthermore, as you connect your machines, you have the opportunity to bring in large amounts of time-series data. Modern wind turbines have 500 sensors and the ability to transmit those sensor readings once a second. Most analytic techniques depend on the idea that the data scientist can try and visualize the data, but how is that possible if I have a 1,000 wind turbines and data for 12, 24 or 36 months?  How can we learn from that?

    Artificial Intelligence (AI) has been increasingly in the news. Google’s DeepMind made headlines when the machine, AlphaGo, programmed to play Go, defeated Lee Sedol, one of the best players in the world, by 4 - 1. Amazon’s Echo and voice assistant Alexa is being widely praised for its voice recognition capabilities, and many people remember how Watson handily beat the best Jeopardy players in the world.

    Things have been changing quickly and here is a great example. ImageNet is a database of millions of images. Beginning in 2010 the ImageNet Challenge was established to see how well a machine would do at object recognition. As a point of reference an average person will be able to achieve 95% accuracy. In 2010, the winning machine could correctly label an image 72% of the time. By 2012, accuracy had improved to 85%, and in 2015 the machine achieved 96% accuracy.

    So why have things been changing so quickly?

    First, we’re continuing to get more computing and more storage for lower and lower prices. Next generation compute and storage cloud services can provide thousands of computers for an hour or a day. AI and machine learning software require lots of computing during the learning phase. The second reason is the emergence of neural network algorithms. Third, it’s not possible to apply these advanced AI technologies without data, and lots of it. Consumer Internet companies like Facebook are able to use billions of photos to train facial recognition systems. AlphaGo learned from millions of games of Go and Alexa learned from millions of voice patterns.

    While we’ll continue to see progress in replicating what humans do, we have the opportunity to apply these AI technologies to even more important challenges. Today, many of the machines that generate electricity, transport goods, farm food, or sequence genes have large amounts of data. If we were able to connect these machines and collect the sensor data from them, we would have the opportunity to use AI and machine learning technologies to operate a more precise planet. Imagine a future farm that can use fewer pesticides, which not only reduces the cost of the food, but also makes it healthier. A future power utility could be based on a vast array of solar panels, wind turbines, small hydro generators and batteries to generate more power, much more efficiently. A pediatric hospital could share the results of millions of MRI scans and diagnose patients far faster.

    Next-generation machine companies could not only double their revenues and quadruple their margins, but build a better planet in the process.

    ---

    Timothy Chou, Ph.D.

    Timothy Chou has lectured at Stanford University for over twenty-five years and is the Alchemist Accelerator IoT Chair.  Not only does he have academic credentials, but also he's served as President of Oracle's cloud business and today is a board member at both Blackbaud and Teradata. He began his career at one of the first Kleiner Perkins startups, Tandem Computers, and today is working with several Silicon Valley startups including as the Executive Chairman of Lecida, which is building precision assistants for the IoT using AI technologies. Timothy has published a few landmark books including, The End of Software, and Precision: Principals, Practices and Solutions for the Internet of Things, which was recently named one of the top ten books for CIOs.  He's lectured at over twenty universities and delivered keynotes on all six continents.

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    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1234283 2018-01-25T16:03:55Z 2018-02-01T08:23:50Z Service is Not Break-Fix

    As a student of business, you may have come to realize that with a recurring-service-revenue business, you can not only double the revenues of the company, but also quadruple the margins. I recently spoke with an executive of a large European company who has a 50/50 business; 50% of their revenue is selling machines and 50% is service on those machines. He said, “In 2008 our revenues went down, but our margins went up.”

    But what is service? Is it answering the phone nicely from Bangalore? Is it flipping burgers at McDonald’s? No. Service is the delivery of information that is personal and relevant to you. That could be the hotel concierge giving you directions to the best Szechuan Chinese restaurant in town, or your doctor telling you that, based on your genome and lifestyle, you should be on a specific medication. Service is personal and relevant information.

    I’ve heard many executives of companies that make machines say, “Our customers won’t pay for service.” Well of course, if you think that service is just fixing broken things, then your customers will think you should be building a more reliable product.

    Service is information. In 2004, the Oracle Support organization studied 100 million support requests and found that over 99.9% of them had been answered with already known information.

    Aggregating information for thousands of different uses of the software, even in a disconnected state, represents huge value over the knowledge of a single person in a single location. Real service is not break-fix, but rather information about how to maintain or optimize the availability, performance or security of the product.

    Above is my Amazon home page. Every time you log in, Amazon attempts to deliver information that is personal and relevant to you. For instance, people like you bought this book. If you look closely at the image, you might guess who uses my Amazon account. Now, let’s point something else out, namely the little shopping cart in the upper right hand corner. That’s the transactions processing system. It has to operate securely with scalability, but how important is it?  Not very.  Instead, most of the real estate of the page, and therefore of the company, is dedicated to delivering information that is personal and relevant.  

    Service is information.

    ---

    Timothy Chou, Ph.D.

    Timothy Chou has lectured at Stanford University for over twenty-five years and is the Alchemist Accelerator IoT Chair.  Not only does he have academic credentials, but also he's served as President of Oracle's cloud business and today is a board member at both Blackbaud and Teradata. He began his career at one of the first Kleiner Perkins startups, Tandem Computers, and today is working with several Silicon Valley startups in roles from investor to executive chairman. Timothy has published a few landmark books including, The End of Software, and Precision: Principals, Practices and Solutions for the Internet of Things, which was recently named one of the top ten books for CIOs.  He's lectured at over twenty universities and delivered keynotes on all six continents.

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    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1230695 2018-01-18T17:00:00Z 2018-02-01T08:23:50Z Not Machines, It’s the Service

    If your company builds agricultural, power, construction, healthcare, oil, gas or mining machines you’ve probably heard about the Internet of Things.  All of us in the tech community are excited to tell you about our cool technology to run on your machine, connect it to the Internet, collect data from it, and then make predictions from that data using advanced machine learning technology.

    But maybe the question you’re asking as the CEO of one of these companies is why should I care?  Isn’t this just stuff my geeky R&D staff cares about? How can it be meaningful to my business?  

    I’ll be making the case that with IoT software; you can not only double the size of your business but also create a barrier that your competition will find difficult to cross.

    Next generation machines are increasingly powered by software.  Porsche’s latest Panamera has 100 million lines of code (a measure of the amount of software) up from only 2 million lines in the previous generation.  Tesla owners have come to expect new features delivered through software updates to their vehicles.  Healthcare machines are also becoming more software defined. A drug-infusion pump may have more than 200,000 lines of code and an MRI scanner more than 7,000,000 lines. On a construction site a modern boom lift has 40 sensors and 3,000,000 lines of code and on the farm a combine-harvester has over 5,000,000 lines of code.  Of course we can debate if this is a good measure of software, but I think you get the point.  Software is beginning to define machines.

    So if machines are becoming more software defined, then maybe the business models that applied to the world of software will also apply to the world of machines. Early in the software product industry we created products and sold them on a CD; if you wanted the next product, you’d have to buy the next CD. As software products became more complex, companies like Oracle moved to a business model where you bought the product (e.g. ERP or database) together with a service contract. That service contract was priced at a derivative of the product purchase price. Over time, this became the largest and most profitable component of many enterprise software product companies.  In the year before Oracle bought Sun (whilst they were still a pure software business) they had revenues of approximately $15B, only $3B of which was product revenue, the other $12B, over 80%, was high margin, recurring service revenue.

    In the world of machines, you might wonder why General Electric is running ads on Saturday Night Live talking about the Industrial Internet.  Why are they doing this?  All you need to do is download the 2016 10-K (http://www.ge.com/ar2016/assets/pdf/GE_2016_Form_10K.pdf) and look on page 36.  Out of $113B in revenue they recognized $52B, or nearly 50%, as service revenue.  Imagine if GE could move to 80% service revenue, not only would the company be tens of billions of dollars larger, but also margins for the overall business could easily double. And let me remind you this is all done without connecting the product (software or machine).  Once connecte you can provide even more service and ultimately deliver your product as a service.  As we have already seen in high tech software and hardware moving to product-as-a-service is transformative.

    So if you’re an executive at a power, transportation, construction, agriculture, oil & gas, life science, or healthcare machine company, how big is your service business?

    ---

    Timothy Chou, Ph.D.

    Timothy Chou has lectured at Stanford University for over twenty-five years and is the Alchemist Accelerator IoT Chair.  Not only does he have academic credentials, but also he's served as President of Oracle's cloud business and today is a board member at both Blackbaud and Teradata. He began his career at one of the first Kleiner Perkins startups, Tandem Computers, and today is working with several Silicon Valley startups in roles from investor to executive chairman. Timothy has published a few landmark books including, The End of Software, and Precision: Principals, Practices and Solutions for the Internet of Things, which was recently named one of the top ten books for CIOs.  He's lectured at over twenty universities and delivered keynotes on all six continents.


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    Alchemist Accelerator
    tag:blog.alchemistaccelerator.com,2013:Post/1181877 2017-08-08T20:15:02Z 2018-02-01T08:23:50Z CANDID CONVOS: Angel Fundraising with Ahryun Moon, CEO at Goodtime.io

    Introduction


     Ahryun Moon is CEO and Co-founder at GoodTime.io, a recruiting enablement platform that automates interview scheduling for companies like Airbnb, Stripe, Yelp, Thumbtack and more. She is a financial professional turned engineer! She taught herself how to code while building her first enterprise software at Freescale Semiconductor, Inc., at which time she was a financial analyst. The software got adopted company wide.

    Some interesting things about her:

    1. She caught a thief using Twitter (check out http://bit.ly/2gmr5P4) - gone viral on Hacker News, Reddit, Facebook, Twitter and Youtube

    2. Her team at GoodTime.io won 3 hackathons - Salesforce $1M, Toyota and Launch hackathons

    3. Her team built Etch Keyboard which was featured on the App Store for 3 weeks.

    4. She still has a CPA license in good standing


    The Convo


    Interviewer (ZP): What was the size of your first check?

    Ahryun Moon (AM): $100 was the first check. What happened was right before Alchemist, I was down and depressed and going to a bunch of people asking for advice and feedback and money. I then went to Edith and she, after hearing me out, said, “Hey I'll be your first investor, here's your hundred dollar check. You can put me on Angel list.” With investors the very first check is important so you can put someone's name on your angellist. That’s hard to get. The very first person that wants to be on your investor roster is always challenging. She said to just use her name she’d give us the one hundred dollars. I have kept our hundred dollars even today. So that $100 is still on my cap table, as I really love the fact that she believed in me when no one did. So my first check was $100, and then the second check was 10k.

    ZP: What about the first check over 25k or more?

    AM: Oh 25k or more. The first time that a check was larger than 25K was 50k.

    ZP: And when was the closing date you received it.

    AM: We closed the check on the day of the demo day.

    ZP: And it was just that simple?.

    AM: He came up to me and said he was just ready to write the check.

    ZP: What industry is your company in.

    AM: HR and Recruiting.

    ZP: Tell me about the process of closing that check and from start to finish. How you were introduced all the way through to actually having a check in hand or money in the bank.

    AM: For the 50k check, he was in the audience at the demo day. He loved it. He came up to us and he was literally ready to write the check. I think we got the check within a few days or a week or so. He didn't have any other references. He just saw us at demo day and liked us. Sometimes you can really run into someone that just believes in you and gives you unconditional love for the product that you're making. So I am lucky with that. But I think you just get lucky sometimes.

    ZP: So what was it like doing that to the first 10k check.

    AM: The 10k check was when we were going negative, negative, negative, and we were about to break our 401k. It was one of the Alchemist Mentors and he liked our product from the beginning. We were so afraid of asking for money at the time.

    ZP: How did you meet him?

    AM: He was one of the mentors that we paired up with at one of the events, the CEO mentor event. We did speed dating, he was one of the three people there we met. He liked the idea and we never asked for money. We didn't know to ask for money at the time. We invited him over to our office and we talked for another hour or so after the event. That was after a month or two after we met for the first time. And then we mentioned, “Hey we are looking for investors”. And he simply said “How much”. We told him we were looking for 10k. And he's said, “OK. I don't have a check with me. I'll wire you the money as soon as I get back to my office.” He wired it within a few days.

    ZP: Wow. Was there any back and forth between you or was it pretty straightforward?

    AM: It was really straightforward. People who argue with you and nitpick on this or that and say “I want to see more proof”, they never work out. Investors that ended up giving us money, you can tell from the first meeting that they believe in you and will give you support. So I'll say my advice is this: it's the ones that give you bullshit excuses and say you’re too early, you're too late in the stage, you're pre-revenue you or your team is too small, move on to the next person. They will not give you money. They never gave me any money. People who said those things never gave me money.

    ZP: Those things were just an afterthought when they just believe you.

    AM: Yes. I think I took them extremely personally in the beginning and that made me really, really depressed. Whenever I get that kind of excuse next time I wouldn't too depressed. I will just say, “Ok fine. Next person.”

    ZP: Is there anything else you'd like to share? Maybe something that stuck out with a new kind of angel fundraising process in general or specifically with all the checks that you're trying to close.

    AM: Yeah. Everyone told me not to cold email. Everyone told me not to cold call investors. But I did. I closed our last 100k check with a cold call. So I wouldn't say cold calling is the worst thing you can do. Once you run out of referrals you have to cold call and sometimes you really meet the right person while doing that. So I would not advise against cold calling.

    ZP: That's good advice. cold call. OK. Well that's really good thank you.

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    Alchemist Accelerator